The government’s effort to privatise Air India came to an abrupt halt as it received zero bids from potential players until Thursday, the last day to submit expression of interest in the national carrier. The government will now go back to the drawing board to revise some of the key terms of its stake sale.
The group of ministers, or the Air India Specific Alternate Mechanism, constituted to prepare a strategy for disinvestment of the national carrier is expected to meet within “a couple of weeks” to chalk out the future course of action. The government had aimed at completing the transaction by the end of the calendar year, which it is set to miss.
“As informed by the Transaction Adviser, no response has been received for the Expression of Interest floated for the strategic disinvestment of Air India. Further course of action will be decided appropriately,” the Ministry of Civil Aviation posted on Twitter.
In March, the government made public the broad contours of Air India’s disinvestment and invited bids.
It proposed to sell 76% of Air India along with low-cost subsidiary Air India Express and a 50% stake in AISATS, a ground-handling joint venture with Singapore Airport Terminal Services, as a single entity.
The new owner will have to take the debt and current liabilities of ₹33,392 crore, while the government will park nearly ₹25,000 crore in a special purpose vehicle.
“The current bid process can’t proceed and we would have to take a call on the future course of action. There would be a rethink on the terms of the bid, because the recent architecture has obviously not worked,” Secretary, Civil Aviation, R.N. Choubey told reporters.
He expressed surprise at the lack of any interest in Air India and said the government was “looking forward to a better participation than this.”
