However, any significant reduction in debt has been ruled out, government sources told ET. Senior government officials said there are some options, including allowing interested parties to bid based on the enterprise value, being considered but a significant reduction in debt was unlikely.
“There are a few options on the table (enterprise value). Some relaxations have to be given; restructuring of the transaction will have to take place, since some investors don’t want things to be fixed. Maybe, start with the expressions of interest (EOI) and decide (on the value) before financial bids are closed, but we will have to take a call on that,” said the government official.
“There is interest from investors but there are problems being faced by the sector. We may make tweaks, if necessary. Decisions will be taken in a week to 10 days,” the official said.
Another source said that even if the government were to sell at the enterprise value, debt reduction may not take place since it is already very low.
“Also there is a concern of under selling the asset despite the pandemic because the global situation appears to be improving,” said another official. “Deferring the divestment process is not even an option. If we were to wait, the situation will only get worse,” said a senior government official on a condition of anonymity.
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- Government considering reducing Air India's debt and delaying its disinvestment
- Aviation ministry refuses equity support to Air India
- India weighs dropping debt condition for winning bidder of Air India
3 Comments on this Story
Anil Selarka32 days ago
When Airline sector is in dump, there is no point of selling nearly 70 year oid mega Airline. Wait for about two years now and withdraw from the auction. Meanwhile, the Govt. may renegotiate with the Unions to come to revised agreement in the light of new dynamics. Hire and Fire is the only possible option
Vk Singh32 days ago
BJP and RSS should go on border for fighting Chinese with Modi.
Shri 32 days ago
Sell ASAP. Sell to employees. Sell to top three desi carriers. Use surplus employees in armed forces or national service on borders.