Department of Investment and Public Asset Management (DIPAM) secretary on Friday termed media report indicating approval of financial bids by government in the Air India disinvestment case as ‘incorrect’.
“Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. Media will be informed of the Government decision as and when it is taken,” said DIPAM secretary in a tweet.
The clarification came in the wake of Bloomberg reporting Tata Sons has been selected as the winning bidder for the debt-laden state-run airline Air India.
A panel of ministers accepted a proposal from officials recommending the salt-to-software conglomerate ahead of an offer from Ajay Singh, promoter of India’s airline operator Spicejet Ltd, the report said.
Meanwhile, two government officials told Business Standard that the highest decision-making body constituted for the national carrier’s divestment is yet to meet to grant its nod for the transaction.
The Air India Specific Alternative Mechanism (AISAM) headed by Home Minister Amit Shah is yet to meet to approve the sale of Air India, an official said. The panel is expected to meet soon to grant a final nod to the sale of national carrier. The panel has Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Aviation Minister Jyotiraditya Scindia as members.
The Core Group of Secretaries headed by Cabinet Secretary has held several round of consultations, and is learnt to have suggested Tata Sons as the suitable candidate for taking over the national carrier.
The stake sale process, which begun in January 2020, faced delays due to the COVID-19 pandemic. In April 2021, the government asked potential bidders to put in financial bids. The last day for placing financial bids was September 15.
Tata Group was among the multiple entities that had put in an initial expression of interest (EoI) in December 2020 for buying the Maharaja.
With previous attempts since 2017 failing to get any significant interest and after receiving feedback from potential investors, the government in October last year sweetened the EoI clause relating to the transfer of Air India’s debt to the new investor, giving bidders flexibility to decide on the quantum of humongous debt they want to absorb.
As per the Air India EoI floated by DIPAM in January 2020, 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. The rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.
Air India has been in losses ever since its merger with domestic operator Indian Airlines in 2007.
The airline, which was formed by the Tatas as a mail carrier in 1932, will give the successful bidder control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.
Besides, the bidder would get 100 per cent of the low-cost arm Air India Express and 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports.
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