The Union government, in its second attempt to divest Air India a day after the 71st Republic Day, invited preliminary bids for the airline. The bid calls to divest the entire stake of Air India, its subsidiary Air India Express along with its joint venture Air India SATS Airport Service Private Limited.
Fully government-owned, the Air India is under debt of Rs 58,000 crore. The total debt of Air India and Air India Express to be taken on by the new buyer is Rs 23,286 crore. The balance of nearly 25,000 crores has been absorbed by the government.
Meanwhile, Air India employee unions are expected to meet in Delhi to discuss the proposed privatisation of the airline. The last date for submission of bids is 17 March, and qualified bidders will be notified 31 March, according to bid document issued by the Department of Investment and Public Asset Management. Ernst & Young LLP India is the transaction advisor for the deal.
“The Government of India (GOI) has given ‘in-principle’ approval for the strategic disinvestment of AI (Air India) by way of the transfer of management control and sale of 100% equity share capital of AI held by GOI which will include AI’s shareholding interest of 100% in AIXL (Air India Express Limited) and 50% in AISATS (Air India SATS Airport Services Private Limited),” the document said.
As per the document, “Any private/public limited company, limited liability partnership, body corporate, whether registered or incorporated in India or outside India; or Fund; in each case which is eligible to invest under the laws of India (subject to such parties obtaining applicable statutory approvals) either as a sole bidder or as part of a Consortium are eligible to participate,” it says. The interested bidder, whether a sole bidder or a consortium, should have a minimum net worth of Rs 3,500 crore. Net worth of each participating member in a consortium should be at least Rs 350 crore (10% of Rs 3,500 crore).
Air India, has a 12.7% share of the domestic market and has carried 18.36 million domestic passengers in 2019, according to data from the Directorate General of Civil Aviation. The national carrier had ferried 17.61 million passengers in 2018.