Air India to be sold finally? New bidders invited to buy the airline

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Shreya Durvehttps://newsmint.in/
Future doctor, proud to be myself

Highlights

  1. The government has planned to sell off all the stakes to the airline, due to major losses suffered, after their initial attempt to sell only a portion of the stakes.
  2. The airline has a disinvestment target Rs 1.05 trillion till 31st march.
  3. The airline has been surviving on major debts and a Rs 30,000 crore government bailout.
  4. The government initially offered a partial stakeout, attempting to hold onto a 24% stake, which didn’t sit well with potential buyers.

According to an inside source, the government is to invite new bidders to buy the public airline, Air India, after suffering major losses. They are to sell off 100% of the stakes and privatize the public airline.

The plan is to be set in motion at least by the end of the month. This comes after the airline tried to sell off the company and attempting to keep 24% of the stakes, which didn’t go well with the bidders. In order to improve prospects, the government has now agreed to sell off all its stakes.

The Indian airline is under a disinvestment target of Rs 1.05 trillion for the year. The ministerial panel to divest Air India, including well known political figures like Amit Shah, Nirmala Sitharaman, Hardeep Puri, and many more, met on September 19th, 2019, to discuss the sale.

The airline is under massive amounts of debt amounting to Rs 5,351 as of this year. To handle the debt, the government started the Air India Assets Holding Ltd which parks a part of the airline’s debt not held down by any asset, thus transferring some of the financial burdens.

The present rules for the sale of public airlines doesn’t allow foreign companies to buy 100% of the assets- the limit is restricted to a mere 49%, which limits the number of bidders willing to take on the responsibility of the failing airline.

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