Air India finds no takers, but govt expects a last hour rush
31 May 2018
The government has not received a single bid for the national carrier Air India which is in the divestment process as the deadline for submitting expressions of interest (EoIs) ends today. The government, however, is hopeful of the airline finding a buyer.
The government still feels there is a huge underlying demand for the airline, which was popularly known as the “Maharaja” of the skies, and that offers would pour in.
Civil aviation secretary R N Choubey said the government hasn't yet received bids till the day before, but are expected to "pour in at the last hour."
“As normally happens, we are looking forward to the bids coming in at the last hour of the last day. The timeline will not be extended. Further decisions (on AI sale) will be taken by the alternative mechanism,” Choubey was quoted as saying.
He, however, clarified that there would be no further extension of the deadline for submission of EoI (It was extended from 14 May to 31 May).
Choubey had earlier made it clear that AI will not be sold unless the government gets the right price for it. “The government has the right to sell or not to sell Air India if the bid price is found to be inadequate,” he had recently said.
The Modi administration has offered to sell 76 per cent of Air India. But, with a total debt of over Rs50,000 crore and the government insisting on a minority share for itself besides conditions that it should not lose its domestic character, there are no takers for the airline.
Of the total debt of Rs50,000 crore, bidders for the airline’s arms — AI, AI Express and AI-SATS (airport service company) — will have to take over debt of Rs24,576 crore and current liabilities of Rs8,816 crore or a total burden of Rs33,392 crore.
“As normally happens, we are looking forward to the bids coming in at the last hour of the last day. The timeline will not be extended. Further decisions (on AI sale) will be taken by the alternative mechanism,” Choubey said.
As it turns out, the alternative mechanism of a group of ministers formed for divesting the airline would have to plan afresh for finding an investor.