- The government has decided to come out with the preliminary information memorandum (PIM) inviting EoI by the first week of July
- The government had last year initiated the process to sell majority 74 % stake in the national carrier
New Delhi: Moving at jet speed, the two-stage bid process for selling of entire 100% equity stake in national carrier Air India could kickstart as early as 7 July.
The government has decided to come out with the preliminary information memorandum (PIM) inviting expression of interest (EoI) by the first week of July.
“Besides offering 100% stake to private investors, more loans of the airline would be transferred to the special purpose vehicle (SPV) in order to further sweeten the deal,” said a senior official.
The government had decided to transfer debt amounting₹29,464 crore along with other non-core assets to the newly-created SPV to attract bidder interest for the carrier.
“The transaction advisor (EY) has proposed to raise the transferable debt amount,” the official quoted above said.
Multiple sources said that selling of Air India is the unfinished agenda of the previous government and now that they have made a comeback, the deal would be concluded this time.
The government had last year initiated the process to sell majority 74 % stake in the national carrier but the plan proved a damp squib with no private investor turning up for the offer.
In view of rising fuel price and weak investment environment, the government had put the process on hold maintaining that it would be taken up after Lok Sabha elections 2019.
But with the return of Narendra Modi government almost imminent, the Prime Minister’s Office (PMO) had nudged the nodal Civil Aviation Ministry to complete necessary works for Air India’s disinvestment.
Following this, Civil Aviation Secretary Pradeep Singh Kharola directed Air India Chairman Ashwani Lohani to finalize the financials of Air India and its subsidiaries by end of June 2019.
“Also, the accounts for FY 2018-19 would form the basis of bidding. Therefore, it is necessary that they are prepared with utmost caution so as to reflect the correct financial status,” Kharola had written in the letter.
- The problem for the lenders arising out of these downgrades is that cost of borrowing overseas goes up
- Fitch’s argument is that there seems to be no resolution in sight for assets stuck in insolvency proceedings and bad loans outside courts as well