New Delhi: The government has extended by two months the deadline for placing bids for Air India till October 30 as the COVID-19 fallout has disrupted economic activity globally.
The process of stake sale in the national carrier was initiated on January 27. This is the fourth extension given by the government for putting in bids.
Issuing a corrigendum to the Expression of Interest (EoI) for sale of Air India, the Department of Investment and Public Asset Management 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 to April 30. This was further extended till June 30, and again till August 31.
Also the date for intimation to qualified interested bidders (QIB) has been extended by over two months till November 20, 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.
COVID-19 pandemic has disrupted economic activity globally with many countries announcing lockdown to contain the virus spread. The aviation sector has been hit hard by COVID-19 with airlines cancelling international 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 September 30.
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 of its equity in the state-owned airline, including Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd. In 2018, the government had offered to sell its 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 current fiscal, the budget has pegged disinvestment proceeds at Rs 2.10 lakh crore. This includes Rs 1.20 lakh crore from CPSE share sale and Rs 90,000 crore from share sale in public sector banks and financial institutions, including listing of insurance behemoth LIC.
However, no disinvestment has taken place so far this fiscal.The government has already kickstarted the process for selecting a transaction advisor for the initial public offering of Life Insurance Corporation.