New Delhi: The government has renewed terms to sell ailing national airline Air India, shelving the company’s previous offer along with a fixed level of debt, Civil Aviation Minister Hardeep Puri said on Thursday.
Under the new bid, Air India will be offered on its business value and bidders can quote the level of debt they are comfortable with. The investor who trades the highest business value gets the trader. The measure is to make the offer as flexible and linked to the market as possible, explained senior officials from the ministries of civil aviation and finance.
“After detailed preparations, we reviewed this (previous sale offer) and it was decided to change the bidding parameters and request bids at enterprise value, meaning bids will be invited on equity and debt basis,” Puri said.
The crux of the new offer is that the government will not predetermine the level of debt Air India will carry with it to the new owner, explained Tuhin Kanta Pandey, secretary of the investment and public asset management department.
“That does not mean that you are debt free. The level of debt owed to Air India will be determined by the market rather than determined by us. We do it because it is an uncertain environment. We are unleashing it. It does not mean that the valuation is affected. The valuation will be determined by the market, ”explained Pandey.
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