The ministerial panel headed by Home Minister Amit Shah on disinvestment of national carrier Air India will meet on Saturday to review the progress made so far and future course of action. Among key issues to be on the table are extending deadline for expression of interest (EoI) that expires on October 31.
"The meeting would be virtual and the agenda for the same has been circulated among those concerned. The progress on disinvestment would be discussed," said an official source.
The meeting is crucial given that no private investor has so far shown keen interest in acquiring the debt-laden carrier forcing the government to extend bidding date thrice after the process started in January this year.
The government had invited bids from private players in January to sell its entire 100% stake in the airline and its subsidiary Air India Express, besides 50% in Air India SATS Airport Services Private Ltd, the joint venture company for ground-handling. Sweetening the deal, the debt the new owner would be required to take over had been reduced to Rs 23,286 crore.
As per the EoI document floated by Department of Investment and Public Asset Management (DIPAM) early this year, Air India had a total debt of Rs 60,074 crore as of March 31, 2019. Further, the buyer was required to absorb Rs 23,286 crore with the remaining debt to be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.
The proposal was considered far more lucrative compared to previous attempt when government wanted to sell 76% of its equity stake while retaining the residual ownership.
"The Group of Ministers (GoM) would also discuss the quantum of loan the prospective owner would be required to take," the person quoted above said.
With aviation sector facing the worst crisis in its history due to coronavirus pandemic, many airlines are battling for survival. Air India which has stayed afloat on taxpayer money is no exception, finding it tough to continue operations.
The government has reiterated that it does not want to infuse any further money in Air India and privatise it. Tata Group was earlier be mulling the option to bid for the airline, sources told BusinessToday.In, but they are now re-assessing the plan.
Tata Group already has two airlines -- Vistara and Air Asia India -- and aviation experts doubt if they will buy a third.
It may be noted that it took almost 18 months to finalise a resolution plan for Jet Airways, considered a global airline brand, after it closed operations due to cash crunch in April, 2019.
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