Delhi confirms Air India’s takeover bids are in deficit

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The Indian government has received final offers in its privatization process to sell 100% of its stake in Air India (AI, Mumbai Int’l), a senior finance ministry official confirmed on September 15.

“Financial offers for Air India divestment received by transaction advisor. The process is now in the final stages, ”revealed Tuhin Kanta Pandey, secretary of the ministry’s investment and public asset management department, in a tweet.

A spokesperson for conglomerate Tata Sons told the Press Trust of India that it had submitted a bid for the heavily indebted national carrier, and local media reported that SpiceJet (SG, Delhi Int’l) had also made an offer. .

The latest attempt to sell Air India, including 100% of its subsidiary Air India Express (IX, Mumbai Int’l) and 50% of Air India SATS ground handling, began in January 2020 and has experienced delays due to the coronavirus pandemic. In April 2021, the government invited shortlisted entities to submit their financial offers, setting a deadline of September 15.

The government will soon announce the floor price for the sale, an anonymous government source told Reuters.

India lost nearly 200 million INR rupees (2.7 million USD) per day to operate the carrier, which has now accumulated losses of over 700 billion INR (9.5 billion USD). According to an announcement in January 2020, part of its debt was transferred to a special purpose vehicle (SPV), Air India Assets Holding Ltd, so the buyer would only be required to absorb “only” INR 233 billion ( 3.2 billion USD). Later, in October, the government chose to give bidders the option to bid on the amount of debt they wanted to absorb.

Separately, Air India and Cairn Energy jointly asked the United States District Court for the Southern District of New York to stay the prosecution in the U.S. lawsuit filed by the energy company in May that sought to Seize the airline’s assets by enforcing a USD1.2- $ 1 billion arbitral award, Business Standard reported.

This development comes in the wake of Cairn’s pledge to abandon his efforts to find Indian state-owned assets that he could seize internationally after the government enacted legislation to remove retrospective taxation. .

The joint request, filed on September 13, said a stay of proceedings would give the two companies “additional time to assess the effects and implications” of legislation that repealed the retroactive tax.


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