New Delhi: After receiving multiple expressions of interest for Air India disinvestment, the government has shortlisted steel-to-salt conglomerate Tata group and SpiceJet promoter Ajay Singh for acquiring the national carrier.
As per the sources, the due diligence regarding the Air India acquisition will begin within a few weeks. Before that, the government will float a Request For Proposal (RFP) for privatisation of the debt-ridden airline.
The Department of Investment and Public Asset Management (DIPAM) that falls under the Finance Ministry, will issue the RFP to the final contenders by the next week.
With the RFP, the bidders will get to know the details about the current share of Air India and Air India Express in total bilateral rights, besides contingent liabilities due to retired employees. This will help them in carrying out due diligence.
The shortlisted entities for India Air India may be given time till early July for financial bids. It is presumed that once the bids are locked, closure of the national carrier sale may take around 3 to 4 months post evaluation of financial bids.
According to government officials, the bid will be on the enterprise value. In this enterprise value also, are ratio that has been earmarked between how much the bidder can take as debt and how much he has to give as cash.
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The government has decided that whatever enterprise value the bidders' quote, 15 per cent of that has to be given in cash to the government and the remaining 85 per cent has to be taken as debt along with Air India.
Civil Aviation Minister Hardeep Singh Puri had last month said that the total debt of national carrier Air India as per provisional figures of 2019-20 (Apr-Mar) stands at Rs 38,366.39 crore. The total debt stands at Rs 38,366.39 crore after the transfer of debt amounting to Rs 22,064 crore to the special purpose vehicle called Air India Assets Holding Limited in FY20.
