Air India, the debt-laden flag carrier, is about to be sold to a private company. Air India has been very difficult for the government to sell. Only two bidders, including Tata Sons and SpiceJet, have shown interest in buying the company. Now, according to an ET report, the government on Wednesday decided on the minimum reserve price for the national carrier. Further, the government met both the bidders to discuss more about the proceedings. Some people with knowledge about the matter told the publication that the government has most likely identified a winner, and just a formal announcement by the centre is left now.
No Clarity on When the Winning Bid Will be Announced
As per the people aware of the matter, there’s no clarity on when the winning bid will be announced by the government. A call on the reserve price has already been taken by a committee of secretaries (CoS), but the details related to the same are not available right now. It is believed that the Tata Group is the frontrunner for getting the airline. Tata Sons is believed to have submitted a higher bid than SpiceJet for the national carrier.
It is worth noting that Air India has a lot of debt on its shoulders. The flag carrier has Rs 43,000 crores in debt in its books. The government is planning to reduce this debt by Rs 20,000 crores and transfer the remaining liabilities of Rs 23,000 crores to the new owners.
According to the publication’s report, 15% of the proceeds of the enterprise value of Air India will go to the government, and the remaining amount will be used to reduce the debt of the company. It is most likely going to be Tata Sons who wins the bid for the national carrier. When will the government officially announce the decision is something worth waiting for.