India is proposing to waive a condition that the winning bidder for Air India will have to take out a $ 3.3 billion aircraft loan, people familiar with the case said, as the government struggles to sell the taxpayer-financed loss carrier. Relief package.
Prime Minister Narendra Modi’s administration is being advised that they will harass buyers to bring down this rule, people said that the proposal should not be made public. A group of bureaucrats have implemented the scheme, and under the new proposal, potential buyers will be allowed to bid at the enterprise price and not at the unit price.
A new attempt to sell Air India, which has not made money since 2007, has been hurt by the epidemic, forcing the government to extend the deadline for bidding. Announced in January, the new owner was sweetened only to pass on loans related to the purchase of airplanes. The airline had $ 8.4 billion in total debt at the end of March 2019 and incurred a loss of $ 1.2 billion that year – its highest ever.
Despite the losses, the airline has some lucrative assets, including prized slots at London’s Choke Heathrow Airport, a fleet of over 100 aircraft and thousands of trained pilots and crew. Aviation Minister Hardeep Singh Puri told Parliament last year that the airline would not have to shut down. The new offer adds sweetness to the deal.
A spokesperson for the aviation ministry referred to questions from the Department of Investment and the Department of Public Assets Management, a unit of the Ministry of Finance. A Finance Ministry spokesman was not immediately available for comment.
At least two previous attempts to sell the airline – once two decades ago and another in 2018 – have flopped. In 2001, Singapore Airlines dropped its bid for a stake in Air India, citing political opposition as a reason. The South East Asian carrier was seeking a 40 percent stake with the Tata group in India.
Potential buyers have this time requested the government to extend the deadline for submission of initial bids due to the coronovirus epidemic, the government said last month. Tata SIA Airlines, a joint venture between Singapore Airlines and the Tata Group, which operates under the brand Vistara, is evaluating a possible bid, its chairman chairman Bhaskar Bhat said earlier this year.
IndiGo, India’s largest airline operated by Interglobe Aviation, showed interest in Air India’s international operations and a previous offer for sale to low-cost carrier Air India Express, but pulled it off saying that no- Frills is unable to buy and turn the airline. Air India operations in their entirety.
Indian officials met with nine companies during the roadshow to show interest in selling the stake, including British Airways parent IAG SA, IndiGo, SpiceJet as well as Tata Group, Bloomberg News.
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