No bidders for three years, Govt relaxes sale terms to get rid of Air India |

Finding no takers, the Government has further relaxed the conditions of
sale of the distressed national carrier Air India. Now the offer is to sell it
at its enterprise value with certain adjustments on the level of debts. As
of last year, the debts were 58,255 crore. |
NEW DELHI, Oct 30: The Government has revised the terms of sale of Air India
to facilitate the disposal of the white elephant as early as possible. Draining
the people's money for the luxury of some, the airline has accumulated debts
that is too huge to liquidate. Now the Government is offering to sell it at
its enterprise value. The deadline for bidding has also been changed.
Civil Aviation Minister Hardeep Puri said on Thursday that the earlier terms
of sale of the distressed national carrier have been given up for a more flexible
deal to expedite its discharge.
Now the investor who quotes the highest enterprise value gets the carrier.
The plan is to make the offer as market-linked as possible. “After detailed
preparations, we revisited this (earlier offer for sale) and it was decided
to change the bidding parameters and ask for bids at the enterprise value that
is, bids will be invited on equity and debt basis," Puri said.
The Government had earlier said that any bidder would have to absorb the debt
of Rs 230 billion against a total of Rs330 billion. Now the change means bidders
will set the amount of debt that they can absorb, the Minister told a press
conference on Thursday.
Of the enterprise value quoted by bidders, 15% will be given in cash to the
Government and the remaining 85% will be taken on by the bidder as debt. This
gives more leverage to bidders for participation in the process, Puri posted
on Twitter.
The expressions of interest will now be sought up to 17:00 on 14 December and
the Government will inform qualified interested bidders by 17:00 on 28 December,
according to a notification issued by the Department of Investment and Public
Asset Management. This is the ninth change.
In its first attempt to sell in 2017, the offer was of 76% stake in 2017. In
second and current attempt starting early this year, the offer was of 100% stake
alonwith other attractions. The deadline was changed several times this year.
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