Central govt may extend deadline to bid for Air India
STAKE SALE Panel meets later this week to decide on new date for bid submission
NEW DELHI: The government is likely to extend the March 17 deadline for submitting bids to buy 100% stake in Air India and the home minister led interministerial panel will later this week decide on the new date.
Interested bidders can now have access to the “virtual data room” of Air India, officials said adding that more queries are expected to come in, which would be clarified by the transaction advisor and the ministry of civil aviation.
The government has already extended the deadline for bidders to raise queries on the proposed strategic sale of Air India to March 6 from February 11.
Officials told PTI that the ministerial panel on Air India would meet later this week and decide on the new date for submission of Expression of Interest (EOI) by interested bidders.
The interested bidders can now get access to the virtual data room, which would also have the draft share purchase agreement (SPA), by paying a non-refundable fees of ₹1 crore.
The ministerial panel—air I ndia Specific Alternative Mechani s m ( AI S AM)— i s headed by home minister Amit Shah and comprises of finance minister Nirmala Sitharaman, commerce and railway minister Piyush Goyal and civil aviation minister Hardeep Singh Puri as other members.
The government on January 27 issued the preliminary information memorandum (PIM) inviting EOI for sale of 100% stake in Air India. On February 21, it issued the first set of clarification answering queries regarding the ‘confidentiality undertaking’.
The Department of Investment and Public Asset Management (DIPAM), which is overseeing the strategic sale of Air India, clarified that bidders will have the flexibility to change the structure of the consortium from the time of signing of nondisclosure pact for access to data room till submission of EOI.
It also clarified that a bidder and its affiliate are not allowed to put in bids separately and can only submit EOI as a consortium.
The government last month restarted the divestment process of Air India and invited bids for selling 100% of its equity in the state-owned airline, including Air India’s 100% shareholding in AI Express and 50% in Air India SATS Airport Services Pvt. Ltd.
Interested bidders for Air India should have a net worth of ₹3,500 crore.
After its unsuccessful bid to sell Air India in 2018, the government this time has decided to offload its entire stake. In 2018, the government had offered to sell its 76% stake in the airline.
Of the total debt of ₹60,074 crore as on March 31, 2019, the buyer would be required to absorb ₹23,286.5 crore, while the rest would be transferred to Air I n d i a Ass e t s Hol d i n g Lt d (AIAHL), the special purpose vehicle.
ADANI MULLS BIDDING FOR AIR INDIA
Meanwhile, billionaire Gautam Adani’s energy and infrastructure conglomerate is considering bidding to buy Air India and is pouring into bid documents before finalising a plan, people familiar with the matter said.
The government is offering to sell its entire holding in the lossmaking carrier along with its entire interest in its low-cost arm and 50% in the ground handling unit.
People with knowledge of the development said the mergers and acquisition (M&A) team of Adani Group is scrutinising Air India bid documents and the interest was at a preliminary stage.
Bidding, they insisted, would depend on the due diligence.
If Adani bids, it will join likes of Tata Group, Hindujas, Indigo and New York-based fund Interups who are said to be considering putting in an expression of interest at the close of the bid deadline next month.
Adani Group’s spokesperson c o ul d not b e i mmediately reached for comments.
People familiar with the matter said Adani sees synergy in Air India and its airport operations. It last year won bids to operate six airports at Ahmedabad, Lucknow, Jaipur, Guwahati, Thiruvananthapuram, and Mangaluru.
The deciding factor for Adani to bid for Air India would be the debt and losses.
The buyer will have to take on a fixed debt of ₹23,286.5 crore along with certain identified current and non-current liabilities. The airline has been in losses during the last few years.
While the privatisation bid document does not place any restriction on Adani from bidding for Air India, Airports Aut h o r i t y o f India ( AAI) restricts an airline or a group owning an airline to hold no more than 27% in the airports.