Air India disinvestment: Around 150 queries on carrier's sale

Government has decided to sell 76 per cent of its stake in Air India, along with 100 per cent stake in subsidiary Air India Express, and 50 per cent stake in AISATS

Around 150 queries have been received in the Air India privatisation process, made queries and sought clarifications on the terms of the flagship carrier’s sale. These include both foreign and Indian airlines, as well as a number of domestic and external non-aviation entities, Business Standard has learnt.

“The stakeholder consultation has got a good response. Almost 150 queries have been received,” a senior government official said. He said that the queries are mostly about the treatment of debt, employee future and management of the airline. Transaction advisor EY is responding to the queries and will seek clarification from the government regarding any changes in terms of sale.

The response to stakeholder consultation assumes significance as to major Indian airlines IndiGo and Jet Airways ruled out bidding for Air India that the terms of sale are too strict. However, the official said that there was a chance that IndiGo might rethink their decision.

The last date of submitting queries by interested parties was April 16. According to the practice, the transaction advisor responds to the queries on its own or forwards them to the line ministry – in this case, the Civil Aviation Ministry – or the department of investment and public asset management (DIPAM), if need be. EY will respond to the queries by April 30, the formal expressions of interest (EoI) by prospective buyers are to be submitted by May 14, and qualified interested bidders will be informed by the government by May 28.

The government has decided to sell 76 percent stake in national carrier Air India along with 100 percent stake in low-cost subsidiary Air India Express and 50 percent in joint venture AISATS. Sources said that among the foreign players who have sent queries are German carrier Lufthansa, Air France-KLM and private equity funds like BlackRock, Temasek.

Earlier Neeraj Gupta, secretary of DIPAM- the implementing agency of the sale had said that venture capitalists and private equity funds should find it enticing to bid for Air India. “Even in Air India, we are not looking for only an airline to take over…Finance is the main criteria and the capability to take over and run such an asset is the main criteria,” he had said.