INDIA – India has announced plans to sell its entire interest in Air India Ltd, in a renewed push to sell the flag carrier.
A document released from the government slated March 17 as the deadline for submission of initial expressions of interest.
The document also noted that any bidder must assume liabilities, including debt of 232.87 billion rupees ($3.28 billion).
An Indian entity assuming substantial ownership and effective control of the airline was another pre-condition that bidders were required to meet for their bids to be considered.
The potential sale of an airline kept aloft by a US$4.2 billion 10-year bailout in 2012 comes as the government divests money-losing assets to manage the fiscal deficit.
The latest offer should garner significant response partly because it involves a clean exit by the government, said CAPA aviation consultancy India head Kapil Kaul.
The expression of intent to sale has already caught the eyes of Indian business house Hinduja Group and US-based fund Interups who have both have expressed interest in buying the airline.
Laxmi Prasad, the chairman and chief business architect of Interups, was quoted as saying the fund had initiated talks with the government and would like to make a case for certain aspects of the airline’s business to be included in the deal.
The government in 2018 had unsuccessfully tried to sell 76% of Air India and offload about US$5.1 billion of its debt, with terms including the retention of all employees.
To prevent a repeat of a failed sale, Civil aviation minister Hardeep Singh Puri said the government was open to suggestions and was willing to alter some provisions if the changes helped to find a buyer.
A successful bidder would win control of Air India’s 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.
It would also get 100% of low-cost arm Air India Express and 50% of AISATS, which provides cargo and ground handling services at major Indian airports, the bid document showed.
The buyer would also have to provide 3% of the value of the airline’s equity as stock options for permanent employees.