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Government to sell 100% in Air India
Why is it in the news?
- The government of India announced the 100 per cent stake sell in the national carrier- Air India.
- The move is to make debt-ridden Air India more attractive for buyers.
- The deadline for submitting Expression of Interest (EoI) is March 17.
More in the news
- The Deal:
(1) The government seeking to sell 100% of its equity share capital, including Air India’s shareholding interest of 100% in AI Express Limited and 50% in Air India SATS Airport Services Private Limited.
- About Debt and Liabilities:
(1) The government would absorb 30 per cent more in debt and liabilities, than in the previous year.
(2) Thus, the government will pass on Rs 23,286.50 crore to the new owner, while absorbing a huge chunk of the current liabilities.
(3) Of around Rs 22,000 crore of liabilities, the new owner will have to absorb only those which are backed by assets.
- Conditions:
(1) Those interested in bidding for Air India must have a net worth of Rs. 3,500 crore.
(2) The bidders must agree to assume the debt apart from other liabilities, and that debt worth Rs 23,286.5 crore.
(3) Management control of the airline would also be transferred to the successful bidder.
- Grabs:
(1) The new buyer will get a total of 146 aircraft, 56% of which are owned by the airline group, while the remaining are on lease.
(2) It will also benefit from as much as 50% of the international market share held by Indian airlines as well as the airline’s 4,400 airport slots at airports in the country and 3,300 slots in 42 countries.
(3) These slots will be available at least for six months after the sale is complete.
Source
The Hindu.