AI's 76% stake sale plan crashes, other alternatives to be evaluated
New Delhi: The Central government has said that a 76 per cent stake sale process of the national carrier Air India has ended, as "no interest" was shown by bidders, however, it remains committed to the strategic divestment for which other alternatives will be evaluated.
"We ran a disinvestment process, where we made it very clear what type of bids we were interested in receiving... We asked certain type of bidders with certain bidding criteria to participate," said Minister of State for Civil Aviation Jayant Sinha.
"No body expressed any interest during that process. So just by that set of those circumstances it is clear that that process right now is over... We have to move forward and we have to consider other alternatives, now as market conditions as industry circumstances change, we will evaluate all those alternatives but that particular specific process for the moment has come to an end, if need be, we can restart that or any other process depending upon the appropriate market circumstances."
However, the government clearly stated that it is still committed to the idea of Air India's strategic divestment.
Sinha added: "The government is committed to strategic disinvestment, what the modalities are and the circumstances are, we will have to monitor and evaluate as we go along."
According to the Civil Aviation Minister Suresh Prabhu a few days back the Empowered Group of Ministers set up to look at the -- Air India Specific Alternate Mechanism -- reviewed the situation.
The minister, who holds the charge of the Ministry of Commerce and Industry said: "... Because there was no interest we have decided to review the situation soon. In the meantime to ensure that Air India runs properly a plan is being prepared by the Air India management to ensure that AI continues continues operate efficiently.
On May 31, the Ministry of Civil Aviation said that "no response" was received even during the extended submission deadline for the 'Expression of Interest' (EOI) bids under Air India's divestment process.
"As informed by the Transaction Adviser, no response has been received for the Expression of Interest floated for the strategic disinvestment of Air India," the ministry had said in a tweet.
"Further course of action will be decided appropriately."
The government on May 1 had released a detailed document on clarifications sought by interested bidders regarding the divestment process.
The clarification document outlined that net current liabilities as Rs 88.16 billion (Rs 8,816 crore) and "these will remain with AI and AIXL (Air India Express) as these have been incurred in the course of business."
"After deducting Rs 88,160 mn from Rs 333,920 mn, the remaining figure of INR 245,760 mn is the debt and liability quantum that will remain with AI and AIXL."
As per the old timelines, the submission deadline for the EOI bids was earlier extended to May 31 and consequently, the date for the "intimation to the Qualified Interested Bidders" -- QIB -- which was supposed to have been the next stage was slated for June 15.
It was expected that by August-end, the government will be able to determine the highest bidder.
On March 28, the government had issued a Preliminary Information Memorandum (PIM) inviting 'EOI' for the strategic divestment of AI, along with the airline's shares in AIXL and AISATS (Air India SATS Airport Services) from private entities including the airline's employees.
The Central government owns 100 per cent equity of Air India. In turn, the airline holds full stake in Air India Express, while it holds 50 per cent stake in the joint venture AISATS.
Accordingly, it has been planned to divest 76 per cent government stake in AI, 100 per cent in AIXL and 50 per cent in AISATS.