India to make Air India sale deal lucrative |
After a failed attempt to sell off the national carrier Air India, the government has now decided to go ahead with the process to divest stake in Air India and is discussing proposals to further sweeten the deal for prospective bidders by allowing some relaxations along the bidding process. The government is now considering options, including allowing interested parties to bid based on the reduced enterprise value. However, a significant reduction in debt was unlikely. The government, which did not get any bids for the national carrier in 2018, called for bids again in January this year to sell its stake in Air India, Air India Express, and 50% of ground handling company, AISATS. To attract the right bidders, the government had reduced the airline`s debt to about $3.1bn from $8.3 in order to make it more attractive to suitors and is unlikely to reduce the debt further as the reduced debt is against assets. As Covid-19 has impacted businesses across the globe, including aviation, the interest in Air India privatization has not been satisfactory, leading to extending the deadline for submission of interested bids more than once. The government also cleared its stance on the suggestion of privatization of the airline for three years.
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