New Delhi, Oct 23 : The Centre’s top group of ministers looking into Air India divestment is slated to meet on Saturday with the agenda ranging from extending the process to allowing greater debt re-structuring.
These key decisions might come at a time when the divestment deadline of October 31 is fast approaching.
The meeting of the AISAM (Air India Specific Alternative Mechanism), headed by Home Minister Amit Shah, will be conducted via video conferencing. Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri, Commerce Minister Piyush Goyal amongst others, will be participating.
As per sources, extending the deadline for submission of initial bid or expression of interest (EoI) till December is on the cards.
Another significant change that might be put forth for AISAM’s approval will be a change in the deal’s financial structure, especially concerning the airline’s debt.
Under this change, sources said that the bidders would be given the option to decide on the quantum of debt on the Air India books that they will like to absorb rather than freezing the debt amount and seeking investors’ bids.
As per the Air India EoI, floated by DIPAM in January, 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.
With the proposed changes, buyers will decide on the level of debt that they will take and the one taking the largest debt may be considered favourable to be declared winner.
The Centre is, however, said to be finding it tough to get investors on board.
A Tata Group-led consortium was considered the favourite to take over the airline earlier but its interest lately has been subdued. With foreign airlines bleeding over fall in air travel during the pandemic, getting investors would be difficult.
But Air India, with vast pool of international flying slots and running overseas operations under the Vande Bharat scheme, is expected to get some investor interest.
Air India has been been unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines Ltd, and since then is flying on government budgetary support, adding pressure to central resources.
Air India disinvestment will be a key component of this years sell target of Rs 2.1 lakh crore. The government has so far mobilised a mere Rs 5,500 crore as disinvestment receipts.