Govt relaxes bidding norms for AI stake sale compared to 2018

New Delhi: In efforts to make Air India disinvestment more attractive, the government has relaxed the bidding norms wherein networth for potential bidders has been fixed at Rs 3,500 crore and minimum stake for an individual consortium partner has been lowered to 10 per cent.

In 2018 when the government sought to offload 76 per cent stake in Air India, the networth amount and minimum consortium partner limit were set at Rs 5,000 crore and 26 per cent, respectively.

The government on Monday came out with the preliminary information memorandum (PIM) for 100 per cent disinvestment of debt-laden Air India as well as sale of Air India Express and 50 per cent shareholding in equal joint venture AISATS. A person in the know of the PIM details said, an entity can put in bid for Air India on the "strength of its parent", which was not there before.

A consortium can participate in the disinvestment process, provided each partner has at least 10 per cent stake as well as 10 per cent of the Rs 3,500 crore networth requirement, according to the bid document.

The lead member of a consortium should have at least 26 per cent stake. Individuals are allowed to bid as part of consortium. Also, a domestic carrier without networth can have up to 51 per cent stake while the partner should be able to comply with the Rs 3,500 crore networth criteria.

In 2018, the government had proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players. While, the government would retain 24 per cent stake in the national carrier, the winning bidder would be required to stay invested in the airline for at least three years. As per the 2018 preliminary information memorandum document, the transaction involved Air India, its low cost arm Air India Express and Air India SATS Airport Services Pvt Ltd. The latter is an equal joint venture between the national carrier and Singapore-based SATS Ltd.