The government is likely to extend the April 30 deadline to bid for Air India as the Covid-19 fallout has disrupted economic activities globally, an official has said. This would be the second extension in the deadline to submit bids for Air India since the government initiated the process of stake sale in the debt-ridden national carrier on January 27.
Initially, the bid submission deadline was March 17, which was extended to April 30 in view of the requests from interested bidders (IBs) and situation arising out of coronavirus.
“There is a case to extend the bid submission deadline for Air India given the current global and domestic situation,” the official said.
The Covid-19 pandemic has disrupted economic activity globally, with many countries announcing lockdown to contain the virus spread.
The aviation sector has been hit hard by Covid-19, with airlines cancelling international flights and announcing pay cuts for employees.
After an unsuccessful attempt to sell Air India in 2018, the government in January 2020 restarted the divestment process and invited bids for selling 100 per cent of its equity in the state-owned airline, including Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
In 2018, the government had offered to sell its 76 per cent stake in the airline.
Of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.
For the 2020-21 fiscal year, the Union Budget has pegged disinvestment proceeds at Rs 2.10 lakh crore. This includes Rs 1.20 lakh crore from CPSE share sale and Rs 90,000 crore from share sale in public sector banks and financial institutions, including listing of insurance behemoth LIC.