Tuesday, October 05, 2021

Ministerial panel on Air India's privatisation meets to discuss winning bid

The ministerial panel on Air India's privatisation met today to discuss and approve the winning bid for Air India. ET was the first to report last week that the committee headed by home minister Amit Shah is empowered to clear the Air India divestment. The other members of the panel are finance minister Nirmala Sitharaman, commerce minister Piyush Goyal and aviation minister Jyotiraditya Scindia.

The long-awaited Air India divestment is being heralded as one of the biggest reforms by the Narendra Modi government. The earlier attempt in 2018 didn’t find any takers.

Sources had also indicated that the Tata Group is likely to win the bid to run Air India. The national carrier has received two bids- one from the Tata Group and the other from SpiceJet Chairman Ajay Singh in his personal capacity.

Bids for the carrier were sought at an enterprise value. Under the formula, a minimum of 15% was to go to the government and the rest will be used to reduce existing debt.

Air India’s total debt stands at Rs 43,000 crore, an increase of about Rs 20,000 crore in the past two years due to the effects of Covid on the industry. The government plans to absorb this portion and transfer the airline to the new owners with a debt of Rs 23,000 crore--a large part of it will be retired with the bid money.

04/10/21 Mihir Mishra/Economic Times

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