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Watching AI stake sale process 'closely', may get involved at later stage: IFC

Press Trust of India  |  New Delhi 

As the government awaits expression of interest for stake sale, (IFC) has said it is "watching the process closely and may get involved at a later stage".

IFC, part of the World Bank Group, made it clear that it is currently not involved in the disinvestment process.

The government has came out with a detailed preliminary information memorandum, detailing plans to offload up to 76 per cent stake in debt-laden and transfer the management control to private players.

However, the ambitious stake sale of Air India as well as its two subsidiaries seem to be hitting air pockets with two potential bidders -- and -- deciding to keep away citing the contours of the process.

While reports have mentioned that various entities, including quite a few global airlines, are interested in Air India disinvestment, there has been no official word about any particular entity.

At present, IFC is not involved in the Air India disinvestment process, a said, adding that normally it does not join the fray during the bidding phase.

"However, we are committed to bridging development gaps in India and financing transport and logistics is one of our top strategic priorities, as it is for the country.

"Therefore, we are watching the Air India process closely and may get involved at a later stage. Once the winning bidder is chosen, we will evaluate the situation to see if we have a role to play," the IFC told in an e-mailed statement.

The response came to a query on whether IFC would be interested in the disinvestment process. A global development institution, IFC is focused on the private sector in emerging markets.

When asked whether would be interested in participating in the disinvestment process, the German said, "your assumption is based on market speculation" and that it does not comment on speculation.

"With a presence of over half a century, India is a strategic market for Group and we are committed to increase our offerings by introducing our latest and most innovative products and services and by providing unrivalled connectivity," it said.

Queries sent to Britsh Airways, Malaysian Airlines, and on whether they are interested in Air India stake sale did not elicit any immediate response. Questions mailed to on whether it would be looking at Air India remained unanswered.

According to the preliminary information memorandum, issued on March 28, the government will retain 24 per cent stake in Air India, while the winning bidder will be required to stay invested in the for at least three years.

The proposed disinvestment will include profit-making Air India and joint venture The latter is an equal joint venture between the national carrier and Singapore-based SATS Ltd.

The existing debt and liabilities of Air India and Air India as on March 31, 2017 would be re-allocated, as per the memorandum.

"It is expected that debt and liabilities, including net current liabilities of Rs 88,160 million, aggregating to Rs 3,33,920 million will remain with AI and AIXL (no change for AI-SATS except in normal course of business). This number shall be further adjusted to account for material business developments post March 31, 2017 for instance purchases/ delivery of aircraft etc.

"The balance debt shall be allocated to Air India which is 100 per cent owned by the subject to receipt of requisite approvals from lenders and regulators, as applicable," the memorandum said. Contingent liabilities will remain with Air India and

Within the contingent liabilities, income tax, customs duty, as well as service tax and guarantee fee/ penal charges due to the government would continue to remain with Air India. There would be the "government commitment to make it good/ indemnify in case the liabilities are confirmed against Air India," the memorandum said.

The last date for submission of Expression of Interest (EoI) is May 14 and intimation to the qualified interest bidders would be made on May 28.

"We welcome the government move to privatise Air India. It is a bold step. However, considering the terms of offer in the information memorandum and based on our review, we are not participating in the process," told on April 10.

Last month, sources had said that a consortium of Jet Airways, and was understood to have expressed interest in the disinvestment of Air India.

On April 5, said that from day one, the has expressed its interest primarily in the acquisition of Air India's international operations and

"However, that option is not available under the government's current divestiture plans for Air India. Also, as we have communicated before, we do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India's airline operations," he had said in a statement.

was the first to evince interest in Air India disinvestment when the government had mooted the plan last year.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, April 15 2018. 16:55 IST