Tuesday, January 02, 2018

Air India stake sale: Debt-laden flag carrier to open books to likely bidders

New Delhi: Debt-laden flag carrier Air India will open its books to all prospective bidders by giving them access to a virtual data centre that would contain relevant information on assets, liabilities and contracts signed to date.

"It will have details of all assets, such as slots, aircraft and others, liabilities, and details of all the contracts that the airline has signed to date with various vendors. This will be a one-stop answer to all the questions that a bidder would have," said a source aware of the plans.

All prospective bidders can get access to the data centre upon signing a non-disclosure agreement. However, companies visiting the data centre would not necessary mean that they would bid for the airline.

This data centre project is being spearheaded by S Venkat, who retired as director-finance from Air India and is now a financial advisor to the airline.

Aviation industry insiders say that such a move would be beneficial for prospective bidders.

"A large number of contracts of Air India — say aircraft, spares, catering and others — have not been done as professionally as any private airline would have done. The real problem areas for any prospective bidder would be these contracts — and employees. While the data centre will give a fair idea of the level of complications with contracts, employees will still be an unaddressed problem," said an aviation industry insider, who did not want to be named.

The government has decided to exit the airline by selling its stake. While the Cabinet has approved the move in principle, a committee headed by the finance minister was formed to decide on the modalities of the exit.
02/01/18 Mihir Mishra/Economic Times

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