New Delhi: The Centre is all set to go ahead with the process of disinvestment of cash-strapped Air India and is reportedly considering suggestions to further sweeten the deal for prospective bidders by allowing some relaxations along the bidding process. Earlier this year, the stake sale process was restarted with amended terms, including hiving off a significant part of the 87-year-old national carrier’s debt and putting the entire 100 per cent stake on the block.
It is worth mentioning here that back in 2018, there were no bidders for the beleaguered airline when the government had offered to sell a 76 per cent stake.
Top government officials with knowledge of the matter told ET that the government is unlikely to go for a massive debt reduction. However, there are some possibilities, including allowing potential bidders to bid based on the enterprise value. “There are a few options on the table (enterprise value). Some relaxations have to be given; restructuring of the transaction will have to take place, since some investors don’t want things to be fixed. Maybe, start with the expressions of interest (EOI) and decide (on the value) before financial bids are closed, but we will have to take a call on that,” the financial daily quoted the government official as saying.
He went on to add that investors showed interest but the aviation sector is facing headwinds. The Centre may modify, if necessary. Decisions will be taken in 10 days. Another source mentioned that even if the government were to sell at the enterprise value, debt reduction unlikely to place since it is already very low.
The publication quoted the official as saying, “Also there is a concern of underselling the asset despite the pandemic because the global situation appears to be improving.”
21/09/20 ETNowNews.com
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