• Saturday, June 25, 2022

Business

Privatisation of India’s loss-making national carrier likely to be delayed

Photo: iStock

By: Pramod Thomas

THE privatisation of India’s national carrier Air India will be delayed further as the divestment process is unlikely to conclude in 2020-21, an official has said.

Tata Group and US-based fund Interups Inc were among the entities that put in preliminary bids last week for buying the loss-making carrier, which was started as a mail carrier in 1932.

A group of over 200 Air India employees also submitted an expression of interest for Air India in partnership with Interups at the close of the deadline on December 14.

“The transaction advisor will inform the qualified bidders by January 6 following which the bidders will be given access to virtual data room (VDR) of Air India,” an official said.

The share purchase pact will be shared with the bidders, following which financial bids would be invited, the official added.

The government is selling its entire 100 per cent stake in Air India that has been in losses ever since its 2007 merger with domestic operator Indian Airlines.

The stake sale process got delayed due to the Covid-19 pandemic and the government has extended five times the deadline to submit preliminary bids for the carrier.

The successful bidder 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.

Besides, 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.

In total, Air India has a debt of Rs 60,074 crore (around $8,135 million)

After its unsuccessful bid to sell the loss-making carrier in 2018, the government in January 2020 restarted the divestment process and invited bids for selling 100 per cent of its equity in the state-owned airline.

In 2018, the government had offered to sell its 76 per cent stake in the airline.

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