New Delhi: The government of India has decided to go on a strategic sale and also turned down a suggestion to run operations for the next two-three years for Air India.
It may ask bidders to bid for Air India based upon combined equity and debt value or even shut down the national carrier.
The panel of officers who have been appointed to look upon the options proposed by the transaction adviser, Ernst & Young — is also not in favour to lessen the debt by Rs 23,000 crore.
Some other potential bidders have also sought clarification on this matter.
The final procedures have to be prepared by the core group disinvestment which will be headed by Cabinet secretary Rajiv Gauba, before the green light from a ministerial panel, the groundwork is done by the inter-ministerial group (IMG), the publication mentioned.
The top government sources suggested that the finance ministry is looking upon the department of investment and public asset management (Dipam) moving ahead with the disinvestment programme of public sector companies in line with the Cabinet decision. The fresh proposals are unlikely to be taken up immediately, As per Times of India.
Air India has about 15,000 employees and vast infrastructure, and closure of the airline was not an option. Also, it will lead to more value erosion. Aviation minister Hardeep Puri has several times said that the choice “is between privatising and closing down”.
The government has extended the deadline for the submission of interest to October 30. According to sources, The inter-ministerial group (IMG) was of the view that the equity value dropped over the last one year due to Air India losing market share as Covid-19 largely affected its profitability.
An officer said “Fewer the conditions, the better it is,” and also added that the government is keen to exit the national carrier which has been in the drain on the exchequer for several years.