Government denies Tata report as choice
A top government official on Friday said the Group of Ministers (GoM) headed by Home Minister Amit Shah will meet soon to decide on the winning bidder for Air India.
“The Air India Specific Alternative Mechanism (AISAM) will meet soon and take a decision,” the official said. Hindu When asked about the outcome of the financial bids submitted by Ajay Singh of Tata Sons and SpiceJet earlier this month. AISAM is the name given to the GoM headed by Amit Shah. This includes Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Aviation Minister Jyotiraditya Scindia.
The statement also means that senior bureaucrats have already met to lay the groundwork before the final approval by the GoM and may have identified the winner of the stake sale.
Earlier in the day, the secretary of the Department of Investment and Public Asset Management (DIPAM) denied media reports that the government had approved Tata’s bid as the winning bid.
The government will divest its 100% stake in Air India, Air India Express and 50% stake in ground handling company AISATS. Bids for the national carrier are being sought at the enterprise value, or the combined value of the debt and the equity of the AI, which gives potential buyers the flexibility to indicate how much debt they are willing to take.
As per the plan, 15% of the total enterprise value will have to be paid to the government in cash and the rest will be used to reduce the debt burden of the airline.
Air India’s debt stands at Rs 43,000 crore after the government transferred a loan amount of Rs 29,464 crore to a special purpose vehicle to attract buyers.
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