Air India Disinvestment: Tata Group, SpiceJet Likely To Make Financial Bids

This as Union Civil Aviation Minister Jyotiraditya Scindia had earlier said the financial bids for this should come in by September 15.

Air India (File Image)

New Delhi: Prime Minister Narendra Modi-led government has initiated the process of financial bids for the debt-laden national carrier Air India.

This as Union Civil Aviation Minister Jyotiraditya Scindia had earlier said the financial bids for this should come in by September 15.

READ: To Boost Domestic Manufacturing, Cabinet Approves Rs 26,058 Cr PLI Scheme For Auto And Drone Sector

Asserting the disinvestment process of Air India was on the “right track”, Scindia said the next move would be initiated after the financial bids.

The ruling dispensation, which failed to find any buyer for a 76 percent stake in the national carrier earlier in 2018, is expected to complete the sale of Air India with at least two buyers expected to submit financial bids by September 15.

“The Tata Group, through its holding company and SpiceJet chairman Ajay Singh, is likely to make its financial bid for the airline in his personal capacity,” an industry source told ANI.

“We are very optimistic that this time Air India will get a new bidder,” said a government source on the condition of anonymity.

Air India is burdened with a huge debt of around Rs 43,000 crore of which Rs 22,000 crore will also be transferred to the Air India Asset Holding Limited (AIAHL).

Stating “the debt of the airline has now increased to Rs 43,000 crore and all these loans are under government guarantee”, sources said “the government will bear this debt before the airline is transferred to the new owners”.

The government, though, declined to share any details on expectations from the sale of Air India, which currently has control over 4,400 domestic and 1,800 international landing and parking slots at domestic airports as well as 900 slots abroad.

The government is planning to sell a 100 percent stake in the airline and its low-cost subsidiary Air India Express besides a 50 percent stake in ground handling company Air India SATS Airport Services Private Limited (AISATS).

The other properties, including the Air India building in Mumbai and Airlines House in Delhi, will also be part of the deal.

Air India's subsidiaries such as Air India Engineering Services Limited (AIESL) and Air India Air Transport Services Limited (AITSL) will also be part of the AIAHL.