Air India sale: Govt extends deadline to bid for cash-strapped national carrier by two months till 30 June

New Delhi: The government has extended the deadline to bid for Air India by two months till 30 June, as the COVID-19 fallout has disrupted economic activity globally.

This is the second extension in the deadline to submit bids by investors for Air India since it initiated the process of stake sale in the debt-ridden national carrier on 27 January.

Govt says changes to @airindiain bids submission deadline made as per requests from interested bidders;
interested bidders made requests to extend deadline in view of COVID-19 situation https://t.co/VKPKl2ReJe

— CNBC-TV18 (@CNBCTV18Live) April 28, 2020

Issuing a corrigendum to the Expression of Interest for sale of Air India, the Department of Investment and Public Asset Management said the deadline has been extended in view of the “request received from the IBs (interested bidders) in view of the prevailing situation arising out of COVID-19”.

While issuing the EoI in January, the last date for bids was kept for 17 March, which was later extended to 30 April. This has now been further extended till 30 June.

Also the date for intimation to qualified interested bidders (QIB) has been extended by 2 months till 14 July, the DIPAM said in the corrigendum posted on its website.

“Further changes with respect to the Important Dates, if any, will be communicated to the Interested Bidders subsequently,” it added.

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.

The extension of the Air India bid deadline followed the government’s move last month to extend the time given to investors to bid for its entire 52.98 percent stake in Bharat Petroleum Corp Ltd (BPCL) to 13 June. The earlier deadline was 2 May.

After its unsuccessful bid to sell Air India in 2018, the government in January 2020 restarted the divestment process for Air India and invited bids for selling 100 percent of its equity in the state-owned airline, including Air India’s 100 percent shareholding in AI Express Ltd and 50 percent in Air India SATS Airport Services Private Ltd.

In 2018, the government had offered to sell its 76 percent stake in the airline.

Of the airline’s total debt of Rs 60,074 crore as of 31 March, 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 current fiscal, the 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 a listing of insurance behemoth LIC.