NEW DELHI: The government of India has called for bids to sell 100% stake in Air India for the second time after reportedly failing in 2018.
The final date for bids submissions for the national carrier will be March 17, 2020 according to sources.
The government is additionally offering 100% in the airline and reducing the debt of the company to Rs23,286 crore from the usual Rs62,000 crore.
The company’s debt is mainly due to the aircraft purchase, which is against government guarantees. Once the airline is bought by a new owner, the guarantees will also diminish.
In 2018, the government had invited bids for sale of 76% in the company but failed to get a single bidder. The government was expected to hold about 24 per cent of the corporation with membership in the board and there was no plan to significantly reduce the debt.
The government is currently offering 100 percent and has already lowered the airline’s debt liabilities by Rs 29,400 crore from Rs 62,000 croree and will further reduce the entire debt to more than Rs 9,300 crore, offering the airline with Rs 23,286 crore debt.
The government is also expected to sell the airline by also significantly reducing the company’s liabilities. The company, which is projected to have Rs 22,000 crore liabilities, will be sold with a massive debt reduction. Sources said that the government will take on liabilities of the airline too.
The document with the Economic Times of India mentions that the government will take away liabilities against customs duty due to the Income Tax department, service tax due to the Indian government and guarantee fee or penal charge due to the Indian government. It is not sure how much that amount will be.
Just like previously, the government has ordered the new owners to start using the brand name ‘Air India’ and can’t change it to post the acquisition.