India’s government has received the final bids for its privatisation process to sell 100% of its stake in Air India (AI, Delhi International), a senior official at the country’s finance ministry confirmed on September 15.
“Financial bids for Air India disinvestment received by transaction adviser. The process now moves to the concluding stage,” Tuhin Kanta Pandey, secretary of the ministry’s Department of Investment and Public Asset Management, divulged in a tweet.
A spokesperson for conglomerate Tata Sons told the Press Trust of India that it had submitted a bid for the heavily indebted flag carrier, and local media reported that SpiceJet (SG, Delhi International) had also put in a bid.
The latest attempt to sell Air India, including 100% of its subsidiary Air India Express (IX, Delhi International) and 50% in groundhandler Air India SATS, began in January 2020 and encountered delays due to the coronavirus pandemic. In April 2021, the government invited shortlisted entities to submit their financial bids, giving a deadline of September 15.
The government will soon announce the floor price for the sale, an unnamed senior government source told Reuters.
India has been losing almost INR200 million rupees (USD2.7 million) per day to operate the carrier, which has by now accumulated losses of over INR700 billion (USD9.5 billion). According to an announcement in January 2020, part of its debt has been transferred to a special purpose vehicle (SPV), Air India Assets Holding Ltd, so that the buyer would be required to absorb “only” INR233 billion (USD3.2 billion). Later, in October, the government opted to give bidders the flexibility to bid on how much debt they wanted to absorb.
Separately, Air India and Cairn Energy have jointly asked the United States District Court for the Southern District of New York to stay further proceedings in the energy firm’s US lawsuit filed in May that took aim at seizing the airline’s assets in enforcing a USD1.2-billion arbitral award, Business Standard reported.
The development comes in the wake of Cairn pledging to drop its efforts to find Indian state-owned assets it could seize internationally after the government enacted a law to scrap retrospective taxation.
The joint request, filed on September 13, said that a stay on proceedings would give the two companies “additional time to evaluate the effects and implications” of the legislation that repealed the retroactive tax.
