14:17 GMT19 February 2020
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    New Delhi (Sputnik): India has been trying to sell shares of its debt-ridden national carrier, Air India for some time, but failed to find any buyers. Earlier in January, an empowered group of federal ministers headed by Home Minister Amit Shah approved 100 percent privatisation of Air India.

    In yet another attempt, India’s Civil Aviation Ministry has invited an expression of interest from prospective buyers to put their bids on Air India that transports passengers and cargo to 94 domestic and foreign destinations in its fleet of Airbus and Boeing aircrafts, the Department of Investment and Public Asset Management (DIPAM) said on Monday. This time, the government is offering 100 percent of the airline to the bidders. 

    International players are allowed to bid for a 49 percent stake in Air India. While the deadline for submitting investment quotes has been set for 17 March, eligible investors will be informed about their status by 31 March.

    As part of the deal, the airline’s joint venture and subsidiary – Air India SATS Airport Services and Air India Express are also up for bids. However, DIPAM has specified that all bidders must do their own research before jumping into investments.

    “Each Interested bidder must conduct its own independent investigation and assessment of the financial condition and affairs of the companies and must obtain independent advice for the purpose of verifying the accuracy, adequacy, correctness, reliability and completeness of any matters pertaining to or relating to the companies or the proposed transaction including in relation to legal, financial and taxation issues", DIPAM said in its document.

    With this auction, the government aims to mitigate Air India’s $8.45 billion debt. The airline owes $3 billion to airports and other vendors. As per the government’s decision, it plans to write off a $2.20 billion working capital loan. With this, the prospective bidder would have a debt liability of only about $3.25 billion.

    In 2019, Air India, which carried a total of over 18.36 million passengers within India, had a significant 12.7 percent market share in the country, data from the Directorate General of Civil Aviation had revealed earlier.

    Indian Aviation Minister Hardeep Singh Puri has previously explained that Air India needs to be privatised because it was incurring a daily loss of $3.6 million owing to reasons including its outstanding hefty payment of over $704 million (Rs. 5,000 crore) to oil refiners and contingent liabilities from advance booking of tickets accounting for over $1.126 million (Rs. 8,000 crore).

    In December 2019, worried with uncertainty over its survival, Air India pilots wrote to Prime Minister Narendra Modi asking him to allow them to quit while they still have time.

    They also claimed that there had been delays in wage payments for two to three years, affecting their "livelihood and families".

     

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    Tags:
    Auction, India, Amit Shah, Air India
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