Financial offers for Air India likely by September 15
The government expects to receive financial offers for Air India Ltd by September 15, Deputy Civil Aviation Minister VK Singh said on Thursday.
“The deadline for submitting the expression of interest (expression of interest) was 14.12.2020. Several EoIs have been received by the Transaction Advisor (EY), “Singh said in a written response to questions from Parliament.
He said the request for proposal along with the draft share purchase agreement was shared with qualified bidders interested in the transaction advisor on March 30. “Financial offers should be received by 15.09.2021,” he said. Singh did not disclose the shortlisted potential bidders.
The national carrier’s divestiture process was delayed for a few months due to the pandemic and also due to lengthy processes such as physical inspection of assets by potential bidders, Tuhin Kanta Pandey, secretary of the department of Investment and Public Asset Management (Dipam), the nodal agency involved in the divestiture process, said at the Mint India Investment Summit 2021 in April.
The government aims to complete the 100% divestment of Air India before the end of this fiscal year until March.
So far, the Tata group is among the first to acquire Air India.
According to media reports, SpiceJet chairman and chief executive Ajay Singh has also been shortlisted to bid for Air India as an individual. Mint could not independently verify this.
Meanwhile, Singh said Air India’s movable assets would be transferred to the airline’s new owners after privatization.
“The real estate assets are monetized by Air India to offset the debt of Air India Ltd,” he said.
While the government remains committed to privatizing Air India, the carrier’s liabilities are expected to exceed $ 20 billion by 2024-2025, which includes losses reported in fiscal years 21 and 22 due to the pandemic, the carrier said. aviation consultancy firm Capa India in its India Aviation Outlook FY22.
“Therefore, the equation from an investor’s perspective is a potential liability of around $ 20 billion before the business recovers. The government must therefore bear in mind this massive financial burden and consider making changes to the terms and conditions, ”he said.
Air India, which has never made a net profit since its merger with Indian Airlines in 2007, will experience a net loss of ₹9,500- ₹10,000 crore in the year ended March 2021, compared to a ₹A loss of 8,000 crore the previous year, a senior airline official told Mint.
The airline reported losses of ₹7,982.83 crore (provisional figure) in 2019-20, ₹8,556.35 crore in 2018-19, and ₹5,348.18 crore in 2017-18.
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