Government looks to sweeten Air India sale deal, discusses proposals for prospective bidders

New Delhi: The government has decided to go ahead with the process to divest stake in Air India and is discussing proposals to further sweeten the deal for prospective bidders by allowing some relaxations along the bidding process.

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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