Air India, the national carrier’s stake sale bidding process could be completed by October 15, the business channel CNBC-TV18 reported today. The sources told CNBC-TV18 that the government is working towards announcing a winning bid for Air India by October 15, sources informed CNBC-TV18. The financial bids for the airline are likely to be opened tomorrow that is September 29. The disinvestment of Air India is long due and has been in limbo since very long time.
“Tatas are being seen as the front runners for Air India divestment,” sources told CNBC-TV18. The deadline for submission of financial bids for Air India ended on September 15. The government said that it received “financial bids” for Air India.
Initially, when Expression of Interests were invited, at that time, four bidders were against each other to take over Air India. Tata Sons, another consortium of some AI employees and Interups, and Spicejet were in the process for taking over Air India. During the phase of inviting biddings, there were rumours that Adani and Hinduja groups were planning to participate in the Air India bids. The proposal to award the Air India bid will need Home Minister-headed Group of Minister’s approval.
Once the bidding for Air India will be done, the winner who will take over the beleaguered Airline will automatically get control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas. In addition to this, the bidder would also get 100 per cent of the low-cost arm Air India Express and 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports.
Tatas were also the potential bidders when the government tried to sell a stake in Air India in 2001 and 2017. It’s important to note that 85 percent of the bid price will be for Air India debt, while 15 percent will be in cash. Bidders have the flexibility for all cash deal as well. With the aim of achieving almost 1.75 trillion divestment target announced by the government in the Union Budget of 2021-2020, the government is sticking to the timeline and has said that the privatisation of the national carrier will be completed in FY22. Also, the deadline for the final bids to be submitted is on September 15.
Air India posted a net loss of Rs 3,836.78 crore in FY16, Rs 6,452.89 crore in FY17, Rs 5,348.18 crore in FY18, Rs 8,556.35 crore in FY19 and Rs 7,982.83 crore in FY20 as per provisional figures.
Recently, taking to Twitter, DIPAM Secretary, Tuhin Kanta Pandey had earlier said that the disinvestment process has moved to the concluding stage.
“Financial bids for Air India disinvestment received by Transaction Adviser. Process now moves to the concluding stage,” Kanta wrote in the tweet. The government has of late taken several steps to fast-track the much-delayed privatisation of the national carrier. Recently, the government decided to waive taxes on the transfer of assets from the national carrier to Air India Assets Holding Ltd, a special purpose vehicle (SPV).
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