The Covid-19 pandemic is proving to be a good cover for the government’s narrative on a failed Air India selloff. While we are continuously assured of multiple bidders being in the fray for buying out this loss-maker, the government has been postponing the selloff date month after month.
Now, a raging pandemic and resultant disinterest among potential bidders is being cited to push deadlines further. The AI disinvestment saga began more than two years ago, with the government asserting then that there were multiple interested bidders and that this bold decision to offload AI could have only been possible in the Narendra Modi regime.
At that time, the bid conditions made it clear that the government would continue holding a minority stake in the airline and also pass on all the debt to the incoming owner. The sale eventually bombed, not a single bidder came forward due to these restrictive conditions.
Early this year, the process of selling off AI was restarted with amended terms. These included hiving off a considerable portion of the airline’s debt and putting the entire 100% stake on the block. Nine months down the line and multiple postponements later, the airline is still very much with the government even though reports of several bidders being in the fray persist. As the airline awaits a decision on its fate, its already precarious financial situation has worsened.
Now, sources close to developments say that even the one potential bidder – a large, reluctant Indian business house which has been under tremendous pressure from the government to place a bid – may also be holding off. These sources said that first of all, this business house feels any deal would be possible only after all the debt (and not just a part of it) is taken off. This involves a sum of nearly Rs 60,000 crore.
Secondly, this business house may be interested in only signing on a contract to manage operations, not a complete buyout. So instead of outright disinvestment, the government may have to settle with just a private party managing the airline. This would mean that not a single rupee would be earned by the government through selling AI.
21/09/20 Sindhu Bhattacharya/News18
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