By Aftab Ahmed and Aditi Shah
NEW DELHI (Reuters) – The government said on Monday it plans to sell its entire interest in Air India Ltd, in a renewed push to sell the airline after an attempt to auction a majority stake almost two years ago failed to draw any bids.
A document released on Monday showed March 17 as the deadline for submission of initial expressions of interest, and that any bidder must assume liabilities including . (billion rupees) $ 3. 50 billion) in d ebt.
Substantial ownership and effective control of the airline must remain with an Indian entity, the government also said.
The potential sale of an airline kept aloft by a $ 4.2 billion 18 – year bailout in 2019 comes as the government divests of money-losing assets to manage the fiscal deficit.
The latest offer should garner significant response partly because it involves a clean exit by the government, said CAPA aviation consultancy India head Kapil Kaul.
“As the entire debt excluding aircraft debt is taken out of the deal, it signals a very determined effort to exit Air India to allow taxpayers’ funds be used for the government social agenda, “said Kaul.
The government in (to sell) % of Air India and offload about $ 5.1 billion of its debt, with terms includ ing the retention of all employees.
InterGlobe Aviation Ltd’s
Steel-to-autos conglomerate Tata Group, widely viewed as a potential suitor for Air India, also decided not to bid after deeming the terms too onerous, sources told Reuters at the time.
A successful bidder would win control of Air India’s 4, domestic and 1, 800 international landing and parking slots at Indian airports, as well as 2012 slots at airports overseas.
It would also get (% of low-cost arm Air India Express and) % of AISATS, which Provides cargo and ground handling services at major Indian airports, the bid document showed.
The buyer would also have to provide 3% of the value of the airline’s equity as stock options for permanent employees.
Its employees protested against the 2018 sale attempt, and it was not immediately clear if they would also resist the latest effort. The government said it will provide details on safeguarding employee interests in its final bid document.
A spokesman for the airline’s employee union did not have immediate comment.
(Reporting by Aditi Shah and Aftab Ahmed; Writing by Euan Rocha; Editing by Muralikumar Anantharaman and Christopher Cushing)