The government had not received any bids for Air India (AI) till Wednesday afternoon, with the expression of interest (EoI) required to be submitted by 5 pm on Thursday. Aviation secretary R N Choubey said the deadline for submitting the EoI will not be extended. The original deadline was May 14, which was extended to the month-end.
“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. Alternative mechanism is a group of ministers, which is headed by the finance minister, formed for divesting the Maharaja.
Choubey had earlier made it clear that AI will not be sold unless the government gets a 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 government had last year decided to sell AI, which has a debt of almost Rs 50,000 crore. Two months back, the Modi administration offered to sell 76% of Air India. Of AI’s total debt, bidders for the airline arm — AI, AI Express and AI-SATS (airport service company) — will have to take over debt of Rs 24,576 crore and current liabilities of Rs 8,816 crore or a total burden of Rs 33,392 crore.
IndiGo was the only one to formally express interest in AI’s international operations but backed out later when the terms said the bidder will need to take over the entire — including domestic — flights of AI and AI Express. Tata Group and Jet are seen as other potential bidders along with some international airlines.
Once the deadline of getting EoIs ends on Thursday, the government will take about two weeks to determine the eligibility of bids received. Bidders need to have a minimum net worth of Rs 5,000 crore. But Indian carriers with a negative net worth — which includes all except IndiGo — will be considered to have zero net worth and can bid for the Maharaja if they tie up with someone that can take the combined net worth to the required amount.
Financial bids will be invited from the eligible bidders. The highest bidder would be known by August-end. From this stage, the GoM will take further calls on AI sale.