Air India sale
Entities can bid for national carrier Air India on the basis of the financial strength of their affiliates, a proposition that could attract more bidders.The government has proposed selling 100 per cent stake in Air India along with budget airline Air India Express and the national carrier's 50 per cent stake in AISATS, an equal joint venture with Singapore Airlines.As per the PIM, a bidder may also qualify on the basis of net worth of its affiliate, provided such IB (Interested Bidder) itself has a positive net worth,subject to certain conditions.
This means that an entity can bid based on the financial strength of its parent, according to a source involved in the disinvestment process.Such a provision could also help in attracting more bidders.In case an IB is taking the benefit of financial strength of its affiliate, then the net worth of only the affiliate would be used for the purposes of evaluation of financial capability of the IB, as per the PIM.
Government of India (GOI) may prescribe additional conditions (including but not limited to replacement of all GOI guarantee or other GOI support extended on behalf of the companies) in the Request for Proposal (RFP) the PIM said.Qualified Interested Bidders (QIBs) would be required to demonstrate availability of funds for the proposed transaction including but not limited to appropriate expression of support from financial institution(s). confirming ability of the IB to discharge all its obligations defined under RFP and definitive documents related to the proposed transaction,it noted.The successful bidder would have to take over only debt worth Rs 23,286.5 crore while the liabilities would be decided depending on current assets at the time of closing of the transaction.