Had things gone to plan, the civil ministry would right now have begun the countdown to the May 14 deadline for receiving initial bids for the beleaguered Air India. In fact, despite more nays than ayes weeks after releasing the preliminary information memorandum (PIM) on the airline's strategic disinvestment, the ministry had reportedly ruled out any extension in the deadline for interested bidders.
It has now been compelled to make a U-turn on its stand. According to Reuters, the Ministry of Civil Aviation today extended the deadline to receive initial bids for the flag carrier to May 31. The statement reportedly added that Air India will announce the qualified bidders on June 15.
To remind you, IndiGo was the first to opt out of the race, followed by Jet Airways, and then Tata Sons reportedly said that they won't bid for the flag carrier, blaming the terms set out in the PIM. Furthermore, every time the media speculated about the entry of a foreign player - think Swiss Aviation Consulting and Qatar Airways - official denials followed quickly thereafter.
In light of the above, today the government also put out clarifications for as many as 160 questions that it had received from interested bidders on the disinvestment of Air India and its subsidiaries, Air India Express and AISATS. These queries were mainly about the impact of the government's decision to retain a 24 per cent stake in the airline, the make-up of the airline's debt and liabilities, its latest financial performance, slots and employee rights.
So, in the 19-page document released today, the government tried to make the lay of land clearer for interested bidders. For instance, the ministry clarified that "individuals (other than employees) are not allowed to bid". In response to queries on whether privatisation would impact renewal of existing slots and bilateral flying rights, the government said that "Details of existing slots and code share agreements will be provided at RFP (Request for Proposal) stage. It is expected that there will not be any impact of disinvestment on existing slots and bilateral rights. Bidders are advised to undertake their own assessment for the impact of disinvestment process on the existing code share agreement."
The answer to over 50 queries was that details will follow at the RFP stage. The queries related to staff were also more or less left hanging with the government saying "employee concerns are being suitably addressed". One thing that the government made abundantly clear was that its decision to retain a stake in Air India was non-negotiable.
Will these clarifications allay investor doubts and prompt them to submit expressions of interest for Air India and its subsidiaries with collective debt and contingent liabilities of Rs 54,742 crore as of March 2017? In any case, with noises from the government about ensuring that that Air India most remains in Indian hands, it will be difficult to ensure the disinvestment of the ailing carrier.
(With agency inputs)
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