In apparent bid to resurrect Air India privatisation, the government is planning to give flexibility to potential investors to decide on the humongous debt with the national carrier, a top official has said, reported news agency PTI.
The government is seeking to sell 100 per cent of its stake in the state-owned national airline, including Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
“On Air India, we would try and sort out the investor issues with respect to debt… “We will see whether we can give flexibility at least at the EoI stage and let the debt be determined through the market rather than freezing it upfront.
The flexibility to potential investors on the quantum of the Rs 60,074 crore debt that they want to absorb will replace the current condition of the buyer taking over more than a third of the debt and transferring the rest to a special purpose vehicle, Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey said.
The potential investors in Air India have given feedback that due to the uncertainty created by COVID-19 in the aviation sector the debt should not be fixed at the Expression of Interest (EoI) stage, he added.
As per the Air India EoI floated by DIPAM in January, of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.