New Delhi: The divestment process of debt-laden national carrier Air India has entered its final phase as financial bids have been received by the transaction adviser for the airline, the government announced on Wednesday. The Secretary of the Department of Investment and Public Asset Management (DIPAM) that falls under the Finance Ministry, said, "Financial bids for Air India divestment were received by Transaction Adviser. The process now moves to the concluding stage."
Tata Group through its holding company and SpiceJet promoter Ajay Singh in his personal capacity have put in the bid for Air India divestment, said government sources. This is the second attempt of the Modi government to sell the national carrier as it did not find any takers in the first round itself when the government offered to sell a 76 per cent stake in Air India in 2018. In April, the government had initiated the process for inviting financial bids and fixed September 15 as the deadline for bidding.
The government aims to complete the sales by December this year as divestment will be one major source of income to bridge the widening fiscal deficit. The government is selling its entire 100% stake in Air India, which has been in losses ever since its merger with domestic operator Indian airlines in 2007.
"We are very hopeful that this time Air India will get a new bidder," a government source familiar with the development told ETV Bharat on the condition of anonymity. The stake sale process got delayed due to the pandemic and the government had extended the deadline to submit preliminary bids for the national carrier five times earlier. The Centre is planning to sell a 100 per cent stake in the airline and its low-cost subsidiary Air India Express and 50 per cent in Air India SATS Airport Services Pvt Ltd, which provides cargo and ground handling services at major Indian airports.
According to the sources, "the total debt has risen to around Rs 43,000 crore and the government will bear this debt before the airline is transferred to the new owners."
As per the Air India EoI floated by DIPAM in January 2020, of the airline's total debt of Rs 60,074 crore as of March 31,2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL).
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