- The total debt amount will be reduced from Rs 33,392 crores to Rs 23,286.5 crores
- Air India has 33 Aircraft in total
- Various parties have already challenged the new EoI
Recently, the Ministry of Civil Aviation has released the new Expression of Interest (EoI) to all the potential buyers to buy a 100% stake in Air India. The original document issued has uplifted a lot of terms as compared to the previous EoI document of 2018. The significant change that has been done in the new document is that the government doesn’t want any stake in the carrier after the sale, as previously they wanted a share of 24 % for themselves for the expected growth in near future.
New EoI will Reduce the Debt Amount
The new Expression of interest which has been released will lower the debt amount, which will be inherited by the new buyer. According to the new terms, the debt amount will be reduced from 33,392 crores in 2018 to Rs 23,286.5 crores which are over 30 %. The remaining debt amount of Rs 23,286.5 crores will remain with Air India along with Air India Express. At the last parts, the debt amount of Rs 29,464 crores have been shifted to Special purpose vehicle (SPV).
It is worth noting that Vistara might one of the takers for Air India and it could make investments to acquire a stake. Meanwhile, Gulf-based carrier, Emirates has already said that it will not be buying any stake in Air India. However, the debt of Air India remains a major issue for all interested buyers.
New EoI has Been Facing Backlash for Some Quarters
According to the new document, Air India has 33 aircraft in total out of which 15 are wide bodies, and 18 are narrow bodies which are under a finance lease. But according to the new terms, the aircraft is not under a finance lease. Not only this, the debt amount which would be transferred to the new owner would include finance lease, all short and long-term borrowings and others. The sale documents have already been in the criticism. As per the words of BJP Leader Subramanian Swamy the sale is anti-national, and the government must be dragged to court. As the document has been simplified, the analysts are expecting better bids this time. IndiGo has already shown their interest in the debt-laden carrier.
Whenever Arpit boards a plane he is filled with awe and bewilderment and soaring above the skies is something marvellous for him. An aviation and tech geek through and through Arpit writes at AviationScoop not only because he's experienced and good at his craft but also because flying is something which makes his heart flutter with joy.