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The coronavirus epidemic is taking a toll on Air India’s divestment, with the government setting June 30 as the last date for Expression of Interest from interested bidders (IBs). The IBs were earlier supposed to submit their EoI by 5 pm on April 30. The decision to extend the last date has been done as some of the IBs sought an extension, the government website says.
Similarly, the last date for intimation of Qualified Interested bidders (QIB) has also been shifted to July 14. Earlier, the government was planning to intimate the QIB by May 14. “Further changes with respect to the Important Dates, if any, will be communicated to the Interested Bidders subsequently,” the corrigendum says. At the moment there is no clarity about when the divestment process will be completed with the latest extension of two months.
When the divestment process started in January this year, the government had said the sale will be implemented through open bidding route and had set March 17 as the deadline for interested parties to submit their bids. Then officials had indicated that more clarity on who could be the new owner of Air India, Air India Express and Air India SATS Airport Services Private Limited was likely to emerge by May-June.
The government is proposing the strategic divestment of Air India by way of transfer of management control and sale of 100 per cent equity shares capital that it holds, which includes the airline’s 100 per cent shareholding interest in Air India Express and 50 per cent in Air India SATS Airport Services Private Limited.
The government has already taken a number of steps to ensure AI sale goes through this time. In March this year the Union Cabinet approved a proposal that allowed Non-Resident Indians to bid for 100 per cent of the shares owned by the government in Air India. The nod meant that 100 per cent investment by NRIs will be treated as a domestic investment and will not be a violation of Substantial Ownership and Effective Control norms.
Unlike the previous failed bid, this time the government has also decided to offload its entire stake. Further, the debt has been reduced to ₹23,286 crore from ₹60,074 crore and the government has clarified that the net working capital is zero, which means the Maharaja’s current assets are equal to its current liabilities.
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