Centre may receive Rs 15,000 crore from Air India sale: Report

The Centre is likely to receive around Rs 15,000 crore from the sale of its stake in national carrier Air India, it's subsidiary Air India Express and AISATS.

Potential buyers are probably ascribing zero value to the equity of the debt-ridden company, Business Standard reported.

The Tata Group is leading the race to acquire Air India, a source told the publication.

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A reserve price — a formal indicative price — for Air India will be finalised by a group of ministers after receiving the final bids, the report added.

Moneycontrol could not independently verify the story.

This is the government’s second attempt at privatising Air India, a plan that has been delayed due to the COVID-19 pandemic.

Suitors are reluctant to place a significant value on intangible assets, such as airport slots and bilateral rights, Business Standard reported.

"Unlike airports like Heathrow, slots cannot be traded in India. It becomes intangible as the value of such assets depends on how a bidder is willing to use it," a source told the paper.

Further, the value of wide-body aircraft like Boeing 787 and 777 and older generation aircraft like Airbus 320 and Boeing 737 has declined due to the pandemic, the report said.

"The suitors' plans revolved around doing sale and leaseback of Air India's owned aircraft and earn liquidity. But with the pandemic, the new owner may not require those aircraft or good value for those in the lease market," a banker told the paper.