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Centre Planning To Absorb Large Part Of Air India's Debt To Attract Investors
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India, 15 Sep 2020 11:12 AM GMT
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According to the report, a group of bureaucrats has assessed the plan, and under the new proposition, potential buyers will be allowed to bid on the enterprise value and not on the entity value.
The government of India may drop the condition that winning bidder will take the $3.3 billion debt of the Air India. The decision comes as the government is struggling to find a buyer for the national carrier, reported Bloomberg.
For the same, the government earlier transferred $4 billion of Air India's debt to Air India Assets Holding. The deadline for bidding for Air India has been extended four times.
According to the media report, Tata SIA Airlines, a joint venture between Singapore Airlines and Tata Group, operating under the brand Vistara, is looking forward to a possible bid.
The buyers will not be identified until the proposal is public. A group of bureaucrats has assessed the plan, and under the new proposition, potential buyers will be allowed to bid on the enterprise value and not on the entity value, the media report said.
The aviation industry has taken a huge hit due to the global pandemic, forcing the government to keep extending a deadline to bid for the national carrier. The offer, announced in January, was sweetened to pass on only the debt related to plane purchases to the new owner.
As of March, the airline had $8.4 billion in total debt, 2019 and then posted a loss of $1.2 billion the same year, the highest ever.
Last year, Aviation Minister Hardeep Singh Puri had told the parliament that the airline might have to shut down if it doesn't find a buyer. However, the new proposal gives some hope.
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