New Delhi: The prospects of Air India's privatisation in 2020-21 (Apr-Mar) are extremely bleak due to fading investor appetite as global and domestic businesses reel under the impact of COVID-19, two senior government officials said.
"We are all witnessing what is happening to the sector and the cry for bailout from a number of global airline companies. In this condition, it will be too optimistic to expect a lot of interest from investors," one of the two officials told Cogencis.
The first official, on condition of anonymity, said the government was not expecting aggressive bids from potential buyers in the aftermath of COVID-19.
Unless the buyer is extremely interested in Air India, investors are unlikely to look at the company as an investment option in the current financial year, he said.
Another government official said despite the government relaxing a number of provisions for Air India's disinvestment, those are unlikely to yield much investor response looking at the current situation.
"We relaxed key provisions like the decision to sell the entire government stake instead of 76%, but that may not mean much in this kind of market condition where most of the airlines are stressed for funds and are dependent on bailouts," the second official said.
The government also brought down the amount of debt to be taken over by the new investor to 232.85 bln rupees from 333.92 bln rupees previously. Air India's remaining debt will be transferred to Air India Assets Holding Ltd.
Last month, the government extended the deadline for submitting expressions of interest for Air India Ltd by two months to Jun 30 due to the prevailing situation arising out of the COVID-19 pandemic.
The government had on Jan 27 invited expressions of interest to sell a 100% stake in the airline, as well as for the divestment of the company's 100% stake in Air India Express Ltd, and 50% in Air India SATS Airport Services Pvt Ltd. The deadline has been extended twice already since then.
This is the second time that the government has invited expressions of interest to sell its stake in the national carrier.
11/05/20 Tushar Chakrabarty and Sagar Sen/Cogencis
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"We are all witnessing what is happening to the sector and the cry for bailout from a number of global airline companies. In this condition, it will be too optimistic to expect a lot of interest from investors," one of the two officials told Cogencis.
The first official, on condition of anonymity, said the government was not expecting aggressive bids from potential buyers in the aftermath of COVID-19.
Unless the buyer is extremely interested in Air India, investors are unlikely to look at the company as an investment option in the current financial year, he said.
Another government official said despite the government relaxing a number of provisions for Air India's disinvestment, those are unlikely to yield much investor response looking at the current situation.
"We relaxed key provisions like the decision to sell the entire government stake instead of 76%, but that may not mean much in this kind of market condition where most of the airlines are stressed for funds and are dependent on bailouts," the second official said.
The government also brought down the amount of debt to be taken over by the new investor to 232.85 bln rupees from 333.92 bln rupees previously. Air India's remaining debt will be transferred to Air India Assets Holding Ltd.
Last month, the government extended the deadline for submitting expressions of interest for Air India Ltd by two months to Jun 30 due to the prevailing situation arising out of the COVID-19 pandemic.
The government had on Jan 27 invited expressions of interest to sell a 100% stake in the airline, as well as for the divestment of the company's 100% stake in Air India Express Ltd, and 50% in Air India SATS Airport Services Pvt Ltd. The deadline has been extended twice already since then.
This is the second time that the government has invited expressions of interest to sell its stake in the national carrier.
11/05/20 Tushar Chakrabarty and Sagar Sen/Cogencis
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