Thursday, December 10, 2020

Government not to give further extension for Air India sale

The government will not extend deadline for submission of expression of interest by interested parties for sale of Air India, but has allowed them to submit physical bids within 15 days from the deadline instead of one week.

Interested bidders have till December 14 to submit EoIs.

Qualified bidders for Air India will be informed by January 5, 2021 instead of December 29, 2020, as the government has allowed interested parties to send physical bids within 15 days from EoI deadline of December 14, the department of investment and public asset management (DIPAM) said Thursday.

The government has allowed potential suitors to bid for Air India on its enterprise value on the condition that of the total bid amount, about 15% would be given to the government as the price of Air India and the rest 85% will be debt that the winning bidder will take.

The changes were done due to the uncertain environment caused by the Covid-19 pandemic that has impacted the aviation industry around the world, the government had said last month.

As per the new norms, on the date of closing of the proposed transaction, outstanding debt of Air India and Air India Express combined worth up to 85% of the enterprise value quoted by the selected bidder will remain with the airline. The remaining will be allocated to Air India Assets Holding Ltd (AIAHL), the special purpose vehicle of Air India.

Air India has outstanding debt of Rs 23,286 crore after the government brought it down from Rs 62,000 crore earlier this year to make the carrier more attractive to potential suitors.

The government, which failed to get any bids for the national carrier in 2018, called for bids again in January this year to sell its stake in Air India, Air India Express and 50% stake in ground handling company Air India SATS Airport Services, an equal joint venture between Air India and Singapore Airport Terminal Services.

10/12/20 Gulveen Aulakh/Economic Times

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