The Union government has revised the bidding parameters for Air India’s divestment and has decided to ask for bids at enterprise value. Bids will now be invited on the enterprise value wherein bids will be sought on both equity and debt, Union civil aviation minister Hardeep Puri announced on Thursday.
The decision was taken by the Air India Specific Alternative Mechanism (AISAM) on Wednesday following a meeting with the home ministry, Puri said.
Considering the impact on Air India and significant deterioration of operating environment for airlines, various options were considered for the disinvestment of Air India. AISAM has decided to change the biding parameters and ask for bids at Enterprise Value. The bids will be invited on Equity and Debt. In the current PIM, the Debt left in the company would be Rs 23,286 crore,” Puri said.
The Centre has also extended the deadline for inviting bids till December 14.
The Centre in August had issued a notification to extend the deadline for submitting the expression of interest for 100% stake sale of national carrier Air India by two months to October 30.
According to the notification issued by the department of investment and public asset management (DIPAM), the extension was provided following requests from interested bidders due to the prevailing Covid-19 pandemic.
In June, the Centre further extended the deadline to submit bids for the divestment to August 31, the third time since the process began in January.
The national carrier was put on the block by the government on January 27 while a deadline of March 31 was set. It was later extended to June 30 and then to August 31 earlier.
The government has been planning to sell its entire stake in Air India Ltd amid increasing debt and mounting losses. The Centre had earlier this year, in January, announced the stake sale in the debt-ridden airline after an attempt to auction a majority stake almost two years ago failed to draw any bids.
The airline’s accumulated debt is estimated to be more than Rs 69,000 crore. It posted a loss of Rs 8,556 crore in FY19, as against a net loss of Rs 5,348 crore in the previous financial year.
The civil aviation minister in June, had called the national carrier a ‘first-class asset’ during a press briefing and said that the government was confident and hopeful about its divestment plans.