The Centre is working towards announcing a winning bid for Air India by October 15, reported CNBC citing sources. The financial bid for the national carrier is likely to be opened on September 29, said the report.
According to the report, 85 per cent of the bid price will be for Air India's debt, while 15 percent will be in cash. Among those who have submitted bids to acquire the loss-making state airline are Tata Sons, the holding company of India's largest conglomerate, and SpiceJet chief Ajay Singh.
The disinvestment of the airline has long been on the anvil. In July 2017, the Centre gave its 'in-principle' nod to divest stakes in Air India. The national carrier has been in a crisis since 2007 (the year it was merged with Indian Airlines) as it has not registered a profit since then. In fact, it has accumulated losses to the tune of ₹70,820 crore till March 31, 2020, Minister of State for Civil Aviation VK Singh told the Rajya Sabha last month.
'Bids Being Analysed'
On September 25, Union Civil Aviation Minister Jyotiraditya Scindia said the privatisation process of Air India was underway and the technical bids were being analysed before the financial bids are opened.
He, however, refused to elaborate on the number of bids received for the debt-laden national carrier. "We have received technical bids and financial bids which are in sealed envelopes. Currently, the technical bids are being scrutinised. Financial bids will be opened only after scrutiny of technical bids," he said, reported Moneycontrol.
The financial bids will be evaluated against an undisclosed reserve price and the bid offering the highest price above that benchmark would be accepted. The bid will be initially examined by the transaction advisor before the recommendation is sent to the Cabinet for approval. He said the process of privatisation is on and it will reach its culmination.
What Does The Highest Bidder Get?
Once the bidding process is over, the winner who will take over the 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.