Govt To Sell 100% Stake In Air India, Sets March 17 As Deadline For Bids
In a fresh bid, the Government of India, on Monday announced its plans to sell the entire stake in the debt-laden national carrier, Air India.
According to the statement issued by the Department of Investment and Public Asset Management, the last date for submission of the bids is March 17 and qualified bidders will be notified on March 31.
Currently, the Government of India holds a 100 per cent stake in the national carrier and its subsidiary Air India Express Limited (AIXL) which is the profitable low-cost arm of the carrier flying to short-haul international destinations. The government also holds 50% equity share capital of Air India SATS Airport Services Private Limited (AISATS) which is a joint venture that provides ground and cargo handling services.
"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)," stated the document released on January 27.
The airline whose net loss in the year 2019 had increased to ₹8,556 crores from ₹5,348 crores in the preceding year, has total liabilities of around ₹58,000 crores.
The government, earlier in 2018, had offered to sell 76 per cent stake in the debt-ridden carrier which was a failed attempt and a since successful sale of the airline is crucial to meet the strategic divestment targets, the government is offering its entire stake which will supposedly give complete operational freedom to the new owner.
Additionally, in the earlier attempt, the bidders were expected to take over a debt of ₹24,576 crores and current liabilities of ₹8,816 crores which in total stood at ₹33,392 crores. This time the debt has been significantly reduced to ₹23,286 crores which is backed by the aircraft part of the transaction. The current assets and the current liabilities figure have been made equal for the bidders with the entire working capital and other non-aircraft debt to be retained by the government.
Ernst & Young has been appointed by the government to advise and manage the transaction.
The Tata Group, IndiGo and the Hinduja Group are some of the names that have cropped up with an interest in the Air India proposal.
BJP MP and economist, Subramanian Swamy, in a series of tweets, while taking the Modi government to the task, has threatened to drag the government to court and called the proposal "anti-national."
"This deal is wholly anti-national and I will forced to go to court. We cannot sell our family silver," tweeted Swamy.
Air India disinvestment process restarts today https://t.co/72eklh9C3g: THIS DEAL IS WHOLLY ANTI NATIONAL and IWILL FORCED TO GO TO COURT. WE CANNOT SELL OUR FAMILY SILVER— Subramanian Swamy (@Swamy39) January 27, 2020
RT @NAVANGULTEJAS: @Swamy39 Air India on Recovery mode: Maharaja's April-December EBITDA Turns Positive; Loss Narrows— Subramanian Swamy (@Swamy39) January 27, 2020
CC @Swamy39 @jagdishshetty
PM @narendramodi Sir why does govt still want to sell this Family Silver instead of strengthening it ? https://t.co/C1SCV3mCPJ