Wednesday, May 12, 2021

Strategic sale: Financial bids for Air India, BPCL likely to be delayed by 3 months to September

With the second wave of Covid hampering movement of executives of bidders, the asset evaluation of the two large CPSEs on the block – BPCL and Air India – is being delayed. This has increased the chances of the due-diligence process getting extended, and according to official sources, financial bids for the two firms is likely to be delayed by three months to September.

The government is, however, still confident that both the transactions would be completed in the current fiscal.

“The transaction advisers are in touch with bidders, who have sought extra time for putting in bids for AI. Covid has affected mobility of bidders’ representatives…site inspection is not happening,” an official said, adding that the BPCL sale process was also facing similar difficulties.

Even though shortlisted bidders of both companies have been recently given access to data room and the actual share purchase agreement (SPA) for better understanding of the asset and liabilities of the companies, bidders have to physically assess the true value of assets of the companies. “After bidders are comfortable and complete their due diligence, putting financial bids will not take much time,” the official said.

The pandemic has also affected the normal work of transaction advisers and legal advisers for both transactions.

Earlier, the department of investment and public asset management (Dipam) was hopeful that both AI and BPCL sales would be completed by September or thereabouts; the financial bids were to be in by June.

12/05/21 Prasanta Sahu/Financial Express

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