Saturday, November 02, 2019

Air India plans legal, tech audit to attract buyers

New Delhi: Air India is hiring legal and technical experts for a scrutiny of its contracts and the condition of its aircraft to ensure clarity to its probable bidders. “The whole idea of this assessment is to provide a clear picture on all Air India contracts and airplanes for the probable bidders to see before they decide to bid for the airline,” said a senior official.
Although the government did not allow any such audit during the divestment process last year, it changed its stand this time in a more desperate bid to find a buyer for the airline. The government’s attempt to sell 76% stake in the airline drew a blank last time, forcing it to do a course correction that included plans to dilute its entire stake in the ailing carrier. It also plans to clear the entire working capital debt to make the airline more attractive to the buyer. It had a debt of Rs 58,000 crore and the government has already taken away Rs 29,400 crore of it. Discussion is on to take away another Rs 15,000 crore off the books. The idea of such an audit came from consultants EY and the government accepted it, a source said. “While the legal audit will look into contracts signed by the airline and legal cases that the airline is into, the technical diligence will look into the quality of planes by reviewing their history of operations and maintenance,” the source said.
02/11/19 Mihir Mishra/Economic Times
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