Thursday, May 31, 2018

Will bids for Air India 'pour in the last hour' today?

THE Centre has yet to receive any bids for its stake in Air India, the civil aviation secretary told reporters on May 30, a day before the formal bidding process closes.
The government will not extend the deadline for submissions of interest in state-run carrier, RN Choubey said. The deadline for receiving bids has already been extended once to May 31 from May 14.
Responding to the lukewarm interest in disinvestment of...
Air India, the Civil Aviation Secretary, however, added that the government, "expect good response before bid closes tomorrow." He added that bids are expected to "pour in at the last hour."
The government had earlier extended the deadline for submission of Expression of Interest (EoI) from May 14 to May 31.
Earlier this year, the government had floated Express of Interest (EoI) document asking potential buyers of Air India to submit their bids. The EoI document talks about selling 76 per cent stake in Air India, 100 per cent stake in Air India Express (AIXL) and 50 per cent stake in AISATS (ground handling subsidiary of AI).
On May 23, Choubey had said the highest bidder for the airline would be known by August-end. But, the highest bidder might not be the successful bidder, he said, adding the government intends to complete the disinvestment by year-end.
Significantly, he had said the government could decide against selling state-run Air India if it does not get "adequate" price for it.
"The government has the right to sell or not to sell Air India if the bid price is found to be inadequate," Choubey had told reporters.
"Though the transaction advisor (EY) will assess the enterprise value, the right price for the airline will be decided by us," he said. Asked about AI employees' union protests against the proposed sale, he said they were conscious of the fact that airlines would do well after privatisation.
The government had on March 28 unveiled plans to sell up to a 76 per cent stake in the loss-making carrier, and transfer the management control to private players.
The profitable Air India Express and the joint venture AISATS -- an equal joint venture between the national carrier and the Singapore-based SATS Ltd -- will also be a part of the disinvestment process.
The ailing airline's total debt stood at Rs 48,781 crore at the end of March 2017. NDA government, keen to sell the loss-making has been finalising plans in late March to divest a 76 percent stake and offload about $5.1 billion of its debt.
After the terms were disclosed, no company has come forward to say it is interested or to reaffirm previous interest, while Jet Airways and rival IndiGo, owned by InterGlobe Aviation, have already publicly opted out of the race.
In April, Tata Group, widely seen as a potential suitor for Air India, also opted out of the Air India bidding process.
In its initial terms the government said the winning bidder cannot merge the airline with existing businesses as long as the government holds a stake. The winner may also be required to list Air India and would need to abide by rules set to safeguard employee interests, restricting its ability to cut staff.
The civil aviation ministry had earlier made public 160 queries it had received from interested bidders seeking clarity on the initial terms. These were mainly about the impact of the government's decision to hold a 24 percent stake, the make-up of the airline's debt and liabilities, its latest financial performance and workforce.

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