Air India’s divestment will now be made on its enterprise value, where bids will be invited on both equity and debt, union minister of civil aviation Hardeep Singh Puri said on Thursday, adding that the bid deadline has also been extended to 14 December.
The government had, in August, issued a notification to extend the deadline for submitting the expression of interest (EOI) for sale of 100 per cent stake in national carrier Air India by two months to 30 October.
With the impact of corona virus-related restrictions causing significant deterioration of Air India’s operating environment, the government is looking at various options for the disinvestment of Air India. “AISAM (Air India Specific Alternative Mechanism) has decided to change the biding parameters and ask for bids at Enterprise Value. The bids will be invited on Equity and Debt. In the current PIM, the Debt left in the company would be Rs23,286 crores,” Puri said.
Addressing a conference on the divestment plan, aviation secretary Pradeep Singh Kharola said, "The bid will be on the enterprise value... In this enterprise value also, a ratio has been earmarked between how much he (the bidder) can take as debt and how much he has to give as cash."
Kharola further said that of the enterprise value quoted by the successful bidder, 15 per cent will have to be given in cash, and the remaining 85 per cent has to be taken as debt along with Air India, Kharola explained.
Air India had a total debt of Rs58,255 crore as of 31 March 2019. Later, Rs29,464 crore of this debt was transferred from Air India to a government-owned special purpose vehicle called Air India Assets Holding Company Limited (AIAHL).
After its unsuccessful attempt to sell Air India in 2018, the government in January this year restarted the divestment process and invited bids for selling 100 per cent of its equity in the state-owned airline, including Air India’s 100 per cent shareholding in Air India Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.