All eyes on Air India EoI on Monday, likely suitors are Tatas, Hindujas | WeForNews | Latest News, Blogs All eyes on Air India EoI on Monday, likely suitors are Tatas, Hindujas – WeForNews | Latest News, Blogs
Connect with us

Business

All eyes on Air India EoI on Monday, likely suitors are Tatas, Hindujas

Industry sources said that some of the potential bidders could be Tata Group, Hindujas, IndiGo, SpiceJet and a few private equity firms.

Published

on

airindia-wefornews

New Delhi, Jan 26: As the government is set to invite preliminary bids from potential investors for selling 100 per cent stake in Air India on Monday, all eyes are on the portion of airline debt to be taken off its books and qualification for suitors.

Prospective buyers would have to respond to the Expression of Interest (EoI) by March 17, 2020.

Industry sources said that some of the potential bidders could be Tata Group, Hindujas, IndiGo, SpiceJet and a few private equity firms.

Some of the foreign airlines could tie up with local players to place their joint bids.

While overall economic environment remains subdued, industry analysts said that there would be significant investor interest for Air India given its wide domestic and international network, traffic rights, slots at key foreign airports such as London and Dubai, technical manpower and large fleet.

“Besides, the government is ready to go the extra mile to sell off the airline. The government has hinted that it will agree to the demands of potential buyers as it is determined to completely exit the airline business,” said Rajan Mehra, CEO of Club One Air and former India head of Qatar Airways.

Air India is currently bleeding heavily with average daily loss pegged at Rs 20-25 crore. The Modi government is not keen to give any further financial support to the airline and has announced to shut it down if the second disinvestment bid fails.

As per official data, Air India had an operating revenue of Rs 25,509 crore in FY19. As its operating expense during the fiscal was Rs 30,194 crore, the airline had an operating loss of Rs 4,685 crore. On a net basis, its loss was a record high at Rs 8,556 crore (provisional) in the previous financial year.

Air India has a fleet of 125 aircraft and its domestic market share is 11.9 per cent as on December, 2019.

The Modi government had invited the EoI in 2018 to sell 76 per cent stake in the airline but it ended up being a no-show with not a single private firm expressing interest.

Learning from its previous experience, the government has decided to sell its entire 100 per cent stake in the airline. It is also learnt to have sweetened the deal by removing a large part of its Rs 60,000 crore debt and clearing other liabilities.

“We expect significant interest as the Government of India (GoI) has structured a very attractive offer,” said Kapil Kaul, CEO (South Asia) of Sydney-based Centre for Asia Pacific Aviation (CAPA).

While many industry veterans are bullish on investor interest for Air India, some of the sector experts said that it may not be easy given the current business environment globally.

“The global growth forecast has been downgraded. India has seen its GDP growing at slowest pace in the last over six years. The fuel and foreign exchange situations are not great either,” said an expert wishing not to be named.

He, however, added that it is a do-or-die situation for the government as it can no longer infuse money into an airline which is losing Rs 25 crore a day.

An industry insider said that IndiGo is one of the strong contenders for Air India but given the fighting between its co-founders it will be difficult to get shareholders’ approval for placing the bid.

“Initial bids can be placed but before signing binding agreement shareholders’ approval would be required,” said the insider.

(Nirbhay Kumar can be contacted at [email protected])

Business

Sensex crashes 1,100 points; Rs 5 lakh crore gone in 5 minutes over Coronavirus

Published

on

Sensex down

Mumbai, Feb 28 The Indian stocks market crashed early on Friday, with the Sensex falling 1,100 points as coronavirus fears deepened.

At 9.50 a.m., the BSE Sensex was trading at 38,597.53, lower by 1,148.13 points or 2.89 per cent from the previous close of 39,745.66.

It had opened at the intra-day high of 39,087.47 and has so far touched a low of 38,587.51 points.

The Nifty50 on the National Stock Exchange was trading at 11,297.45, lower by 335.85 points or 2.89 per cent from its previous close.

Concerns of coronavirus turning into a pandemic and spreading into countries outside China have off late impacted investor sentiments both in the global and domestic markets.

Continue Reading

Business

Vodafone Idea seeks Rs 35 per GB as minimum floor price

According to the source, Vodafone Idea wants minimum price of outgoing calls should be fixed at 6 paise per minute.

Published

on

By

Vodafone, Idea

New Delhi, Feb 27 : Vodafone Idea has sought fixing minimum tariffs for mobile data at Rs 35 per GB, which is about 7 time the current rate, and for calls at 6 paise per minute along with monthly charges from April 1, to help it pay statutory dues.

Struggling to clear adjusted gross revenue dues of Rs 53,000 crore to comply with a Supreme Court order, the loss-making telco has sought 18 years time to clear the dues, including a three-year moratorium on payment of interest and penalty, according to official sources.

In a letter to the Department of Telecommunications, the company said it wants minimum price of data should be fixed at Rs 35 per gigabyte and minimum monthly connection charge at Rs 50 from April 1, 2020. Current mobile internet prices are in the range of Rs 4-5 per GB.

According to the source, Vodafone Idea wants minimum price of outgoing calls should be fixed at 6 paise per minute.

The demand to raise call and internet rates from Vodafone Idea comes within three months of the company raising rates by up to 50 per cent.

Continue Reading

Business

No impact of Delhi violence on investor confidence: Sitharaman

“But that shouldn’t cause worries, because FDI flows were steady and coming in good numbers while the forex is also doing very well,” she said.

Published

on

By

Nirmala Sitharaman

Guwahati, Feb 27: Claiming green shoots were visible in the Indian economy, Union Finance Minister Nirmala Sitharaman on Thursday denied any adverse impact on investor sentiments due to the Delhi violence and the ongoing anti-CAA protests in various parts of the country.

“The sentiments of foreign investors have not been dampened,” she told a media meet when asked whether investor confidence has taken a hit due to the agitation against the Citizenship (Amendment) Act and the violence in the national capital that has left at least 37 dead and over 200 injured.

Referring to her experiences at the recent Ministerial Conference on International Taxes in Riyadh, she said: “Nowhere was there a concern on something happening in India. On the contrary, there were very prominent investors who said they are now even open to open up a representation office in India, which they don’t have till now.”

The minister said she in fact saw lot of interest on India’s announcement of a national infrastructure pipeline.

“There is interest in India. It continues. And there is more interest in India for investors,” she said.

On whether the Indian companies were apprehensive of a raw material scarcity due to the coronavirus outbreak in China and elsewhere, Sitharaman said she held a meeting with 20-23 industries before leaving for Saudi Arabia, but none of them expressed any anxiety on that count.

“They didn’t express any anxiety about raw material supply, nor did they express any anxiety about exports being disturbed.

“However, of course, some of them felt after two months if the situation did not move, as regards containing the virus, they may start having problems of raw material availability, for which we are trying to see how best we can help them,” Sitharaman said.

To a query on the sluggish economy, the minister said following concrete steps by the government and the Reserve Bank of India, the mood was gradually turning positive.

“There are green shoots visible. Many of them are sustained, even if one or two are weakening. We are very clear that they will also revive,” she said, adding there were monthly ups and owns of some indicators.

“But that shouldn’t cause worries, because FDI flows were steady and coming in good numbers while the forex is also doing very well,” she said.

The minister conceded that there was inflationary pressure when due to climate change issues, prices of crops like onions went up.

“But now, India has lifted ban on exports of onion. That shows there is sufficient quantity of onions in the market, and indicates inflationary pressures are coming down,” said Sitharaman.

“The mood is gradually changing. There is every positive sign,” she said.

Continue Reading
Advertisement

Most Popular