EPFO hikes withdrawal limit from Rs 50,000 to Rs 1,00,000 for medical treatment

The Centre expects financial bids for buying out the government’s stake in Air India to be in by September 15. The Union government has proposed to sell its 100% holding in the State-run carrier AI and AI Express and its 50% stake in AI SATS.

Govt gears up for stake sale

VK Singh, MoS for civil aviation, in reply to a question in the Lok Sabha said the transaction adviser (TA) had received multiple expressions of interest (EoI) for stake sale in Air India. The TA has shared all the necessary documents with the qualified bidders for submission of financial bids and they are likely to be in by September 15.

The government also said the disinvestment process won’t be impacted by the lawsuits filed in the US by Cairn Energy and Devas Multimedia. Cairn and Devas had moved the US District Court for Southern District of New York seeking legal direction in order to hold Air India liable for payment towards the arbitration award they won against the government. The arbitration award was later challenged by the government.

Frontrunners 

The government expects to complete the entire divestment in Air India in FY22. One of the frontrunners in terms of bidding is Tata Group which wants to buy back the airline it founded. A consortium led by Ajay Singh, who is also the promoter of SpiceJet, is also believed to be in the fray.

After putting forth their bids, the investors will need to get a security clearance from the ministry of home affairs and this process might roughly take a month to get completed. Only bids put forth by investors with a valid security clearance will be opened and taken forward. If the winning bidder is able to obtain all regulatory clearances, the transaction might get closed by the end of FY22.

Norms modified

Following the government’s inability to attract significant bidders for the distressed airline since 2017, the proposed deal has been modified. Potential buyers will now have the flexibility of deciding on how much of Air India debt they would like to include in the deal. The buyer will, however, need to pay 15% of the enterprise value of the deal in cash.

Going by the previous terms, the buyer had to absorb as much as Rs 23,286 core of Air India’s total debt that was close to a whopping Rs 60,000 crore, with the government taking the rest.

The relaxation in the norm could help attract more bidders. The bids are expected to be under Rs 20,000 crore, of which Rs 3,000 crore (15%) will flow into the government’s exchequer.