Air India disinvestment | Govt extends deadline to submit bids

The government has extended the deadline for submission of preliminary bids for Air India to April 30 from March 17.

The extension comes after Civil Aviation Minister Hardeep Singh Puri indicated the same on March 6. At the same time, he had reiterated that the divestment process of the national airline was going 'extremely well.'

The extension was on the cards as the government had already extended the deadline to submit queries to March 6 from February 11 earlier.

While extending the date, the Department of Investment and Public Asset Management (DIPAM) in a notification said the changes are in view of the requests received from interested bidders and the prevailing situation arising out of COVID-19.

The government, which had earlier in 2018 attempted in vain to sell Air India, had restarted the process in January. This time though, the government was willing to completely exit the airline. Earlier, only 75 percent of its stake was on offer.

To get more suitors, the Cabinet Committee on Economic Affairs (CCEA) on March 4 allowed non-resident Indians (NRIs) to own 100 percent stake in Air India.

Till then, NRIs were allowed to invest only 49 percent in Air India. The Cabinet, however, did not tweak the foreign direct investment (FDI) limit in Air India, which is currently at 49 percent through the government approval route.

One of the biggest hurdles earlier was the financial burden of Air India. To overcome that, the government will transfer much of the total debt of Rs 60,074 crore to a special purpose vehicle. The new owner will have to take on only Rs 23,286.5 crore.

But even the reduced debt burden could be a concern for investors, as the spread of coronavirus, globally and now in India, has created havoc in the aviation industry.

Many of the suitors, which could include Tata Sons, the Adani Group and IndiGo, will have to re-work their strategy for Air India.

(With inputs from PTI)