The NDA Government received no bids for sale of Air India as the deadline for submitting expressions of interest ended on Thursday May 31,2018
The offer for Air India sale included 76% in Air India Ltd, 100% stake in low-cost international carrier Air India Express Ltd and 50% in Air India SATS Airport Services Pvt. Ltd.
Air India is currently on a bailout approved in 2012, under which it has so far received an equity support of over Rs26,545 crore till 2017.
The NDA Government will now take a call on whether to call off the sale or call fresh bids under revised terms.
“As informed by the transaction adviser (EY) , no response has been received for the Expression of Interest floated for the strategic disinvestment of Air India. Further course of action will be decided appropriately,” the civil aviation ministry said in a tweet.
Experts said that the terms of sale have to be revised to go ahead with the privatisation of the loss making national carrier.
One key concern of investors was the level of management flexibility available to them with the government retaining 24% stake and assuming all shareholder rights available to it under the law, rather than opting to remain as a minority financial investor. The terms that the government will set at a later stage in the sale process relating to protection of employees as well as the level of debt to be retained in the company are among the other key concerns of investors.
As per the current plan, Air India and Air India Express will retain Rs24,576 crore excluding net current liabilities after the sale. Investors have pointed out to government that this is not in line with the airline’s potential future earnings.
The offer for Air India sale included 76% in Air India Ltd, 100% stake in low-cost international carrier Air India Express Ltd and 50% in Air India SATS Airport Services Pvt. Ltd.
Air India is currently on a bailout approved in 2012, under which it has so far received an equity support of over Rs26,545 crore till 2017.
The NDA Government will now take a call on whether to call off the sale or call fresh bids under revised terms.
“As informed by the transaction adviser (EY) , no response has been received for the Expression of Interest floated for the strategic disinvestment of Air India. Further course of action will be decided appropriately,” the civil aviation ministry said in a tweet.
Experts said that the terms of sale have to be revised to go ahead with the privatisation of the loss making national carrier.
One key concern of investors was the level of management flexibility available to them with the government retaining 24% stake and assuming all shareholder rights available to it under the law, rather than opting to remain as a minority financial investor. The terms that the government will set at a later stage in the sale process relating to protection of employees as well as the level of debt to be retained in the company are among the other key concerns of investors.
As per the current plan, Air India and Air India Express will retain Rs24,576 crore excluding net current liabilities after the sale. Investors have pointed out to government that this is not in line with the airline’s potential future earnings.
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