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Indian government sweetens Air India sale by slicing its debt burden by more than half

Indian government sweetens Air India sale by slicing its debt burden by more than half
Business2 min read
  • The Government of India issued a new expression of interest for 100% sale of Air India.
  • The bidding party will have to bear ₹23,286 crore of the total ₹60,000 crore debt of Air India.
  • Recently, the Hinduja Group had expressed interest in bidding for Air India.
Air India is straddling a debt of ₹60,000 crore, and that has put a dampener on the government’s plan to disinvest its stake in it. Today, the Government of India issued a new expression of interest for 100% sale of the troubled state-owned airline.

As per the revised EoI, the bidding party will have to bear ₹23,286 crore of the total ₹60,000 crore debt of Air India. And the deadline for bidders is set on March 17. According to IANS, the net worth for eligible bidders too has been relaxed to ₹3,500 crore from ₹5,000 crore.

The new EOI comes in after multiple attempts at the sale of Air India seem to have failed as few wanted to take on the massive debt. One of the few interested parties include the Hinduja Group. Interestingly, the Hinduja Group was earlier keen on bidding for the now defunct Jet Airways, but now seems to have pivoted to a “better asset”, as per Business Standard.

Earlier, in an interview with TOI, Tata Group Chairman N Chandrasekaran had said that the Tata Group might consider bidding for Air India and will get his team to look into the matter.

In a recent interview with NDTV, Ashwani Lohani, the Chairman & Managing Director of Air India had said that there was no choice but to go ahead with the disinvestment of airline. He had expressed optimism that the airline will perform much better once disinvested.

Meanwhile, for FY19, Air India had posted a massive operating loss of ₹4,600 crore, while its net loss stood at ₹8,400 crore. It has a massive debt of ₹58,351 crore and debtors are knocking down their doors. State-owned oil companies recently sent a letter asking them to pay up dues and threaten to stop supply of aviation turbine fuel (ATF).

See Also:
The billionaires who want to fly Jet Airways are also the world's largest bus manufacturers
Indian government is looking to sell Air India but may keep its debt

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