The government has again extended the deadline to bid for Air India by two months till August 31 as the COVID-19 fallout has disrupted economic activities globally. This is the third time the deadline has been extended.
The divestment process for the national carrier was initiated on January 27. Issuing a corrigendum to the Expression of Interest (EoI) for sale of Air India, the Department of Investment and Public Asset Management (DIPAM) said the deadline has been extended in view of the “request received from the IBs (interested bidders) in view of the prevailing situation arising out of COVID-19.”
While issuing the EoI in January, the last date for bids was kept at March 17, which was later extended till April 30. This was further extended to June 30, and now till August 31. Also, the date for intimation to Qualified Interested Bidders (QIBs) has been extended by two months till September 14, the DIPAM said in the corrigendum posted on its website.
“Further changes with respect to the Important Dates, if any, will be communicated to the Interested Bidders subsequently,” it added.
The COVID-19 pandemic and subsequent lockdowns have disrupted economic activities globally. The aviation sector has been hit hard by the coronavirus pandemic, with airlines cancelling flights and announcing pay cuts for employees.
The government has already extended the time given to investors to bid for its entire 52.98 per cent stake in Bharat Petroleum Corp Ltd (BPCL) to July 31. The initial deadline was May 2, which was extended till June 13.
After its unsuccessful bid to sell Air India in 2018, the government in January 2020 restarted the divestment process and invited bids for selling 100 per cent equity in the state-owned airline, including Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent stake in Air India SATS Airport Services Private Ltd.
In 2018, the government had offered to sell 76 per cent stake in the airline. Of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.
For the current fiscal, the Budget has pegged disinvestment proceeds at Rs 2.10 lakh crore. This includes Rs 1.20 lakh crore from CPSE share sales and Rs 90,000 crore from share sales in public sector banks and financial institutions, including the listing of insurance behemoth LIC. The government has already kickstarted the process of selection of transaction advisor for the initial public offering (IPO) of Life Insurance Corporation.