NEW DELHI: The government is not going to one after the other sell the global and domestic operations of Air India (AI) and interested parties must bid for them together. Bids shall be sought for AI's domestic and global operations as an "integrated airline", Union minister of state for aviation Jayant Sinha stated on Friday.
Interested parties shall be allowed to bid one after the other for subsidiaries of AI. The nationwide service has 5 subsidiaries — low-cost airline AI Express; ground-handling arm AI Air Transport Service; maintenance, repair and overhaul arm AI Engineering Services; regional operator Alliance Air; and Hotel Corporation of India. which runs Centaur resorts.
"We have so far received formal expression of interest (EoI) from IndiGo for AI's airline arm. For the groundhandling and MRO subsidiaries, a few others have done the same," Sinha stated. Some gamers, including Tatas, have informally indicated hobby in AI's airline operations.
IndiGo's EoI used to be for the "international airline operations of AI and AI Express. Alternatively, it is equally interested in acquiring all of the airline operations of AI and AI Express". Now Sinha has made the government's aim clear that AI's global and domestic operations is probably not sold one after the other.
Ernst & Young (EY) is the transaction adviser for the AI sale. Sinha stated, "The divestment of AI is a time-bound process and we expect to award the bids in six-to-eight months. We are going to provide flexibility in the bidding process. Bidders can bid for as many subsidiaries as they want. The transaction adviser will call for multiple bids. It will be a market-driven process."
An AI-specific alternative mechanism or team of ministers headed through FM Arun Jaitley will decide on sides like who all must be eligible to bid for the airline — principally to see if international airways in JV with Indian or international partners must be allowed to buy the Maharaja. Current rules allow Indian carriers to be owned absolutely through international entities however put a cap of 49% on possession through international carriers. This panel may also decide on problems like remedy of AI's unsustainable debt and hiving off certain assets to a shell corporate.
The FM-headed panel will decide methods to make AI — with its debt of Rs 52,000 crore — horny enough for bidders. The airline has a running capital mortgage of Rs 30,000 crore and Rs 22,000 crore on its books.
Interested parties shall be allowed to bid one after the other for subsidiaries of AI. The nationwide service has 5 subsidiaries — low-cost airline AI Express; ground-handling arm AI Air Transport Service; maintenance, repair and overhaul arm AI Engineering Services; regional operator Alliance Air; and Hotel Corporation of India. which runs Centaur resorts.
"We have so far received formal expression of interest (EoI) from IndiGo for AI's airline arm. For the groundhandling and MRO subsidiaries, a few others have done the same," Sinha stated. Some gamers, including Tatas, have informally indicated hobby in AI's airline operations.
IndiGo's EoI used to be for the "international airline operations of AI and AI Express. Alternatively, it is equally interested in acquiring all of the airline operations of AI and AI Express". Now Sinha has made the government's aim clear that AI's global and domestic operations is probably not sold one after the other.
Ernst & Young (EY) is the transaction adviser for the AI sale. Sinha stated, "The divestment of AI is a time-bound process and we expect to award the bids in six-to-eight months. We are going to provide flexibility in the bidding process. Bidders can bid for as many subsidiaries as they want. The transaction adviser will call for multiple bids. It will be a market-driven process."
An AI-specific alternative mechanism or team of ministers headed through FM Arun Jaitley will decide on sides like who all must be eligible to bid for the airline — principally to see if international airways in JV with Indian or international partners must be allowed to buy the Maharaja. Current rules allow Indian carriers to be owned absolutely through international entities however put a cap of 49% on possession through international carriers. This panel may also decide on problems like remedy of AI's unsustainable debt and hiving off certain assets to a shell corporate.
The FM-headed panel will decide methods to make AI — with its debt of Rs 52,000 crore — horny enough for bidders. The airline has a running capital mortgage of Rs 30,000 crore and Rs 22,000 crore on its books.
Govt to sell AI’s desi, international ops together
![Govt to sell AI’s desi, international ops together]()
Reviewed by Kailash
on
December 02, 2017
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