Tuesday, Sep 21 2021 | Time 13:29 Hrs(IST)
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Business Economy


Tatas, SpiceJet place bids for Air India, govt says sale of airline now in final lap

New Delhi, Sep 15 (UNI) Tata Sons and SpiceJet promoter Ajay Singh are in the race to buy crisis-hit Air India and have placed their financial bids.

While a Tata Sons spokesperson confirmed the conglomerate's participation in the second part of the two-stage bidding, SpiceJet spokesperson could not be contacted.
An aviation source confirmed SpiceJet had submitted their financial proposal.

The government on Wednesday said that financials bids for Air India disinvestment have been received and the process to sell the airline to a private player is now in the final lap.

"Financial bids for Air India disinvestment received by Transaction Adviser. Process now moves to concluding stage," Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.

DIPAM has not disclosed the names of the prospective buyers.

After failed attempt in its previous term, the government last year invited expression of interest for selling 100 per cent stake in the carrier.

In order to make the sale attractive for private investors, the government has sweetened the deal this time by offering entire stake in the airline, as against 76 per cent last time, and also taken major chunk of the debt from airline's books.

Moreover, revising the bid criteria in October last year, the government decided that bidding for Air India would be done on the basis of its enterprise value instead of equity value.

This was seen as a major sweetener as enterprise value includes equity, debt and cash held by the company while equity value measures the value of company shares.

The net block of fixed assets as per Books of Account of Air India for the period 2020-21 (provisional) after reducing the accumulated depreciation is Rs 40,078.11 crore. This includes Rs 17,871.93 crore on account of right of use assets (leased aircraft fleet/land).

"The enterprise value set for bidding has not been determined so far," Minister of State for Civil Aviation VK Singh had said in reply to a query in Rajya Sabha on August 11, 2021.

UNI NK
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