India is set to absolve bidders for its loss-making flag carrier from any liability arising out of a lawsuit filed by Cairn Energy Plc, which sought to dispose of the state-run airline’s assets over a long-running tax dispute with the government. Has claimed, according to people familiar with the matter.
Prime Minister Narendra Modi’s administration will offer so-called compensation to the financial bidders of Air India Ltd, which the government has repeatedly tried to sell, the people said, asking not to be identified as the matter is confidential. In the latest effort, a group of bureaucrats on Saturday approved the final sale purchase agreement, and the plan is likely to be approved by a group of ministers this week, he said.
The government is expected to receive the financial bid by September 15, junior civil aviation minister VK Singh told Parliament in July. Air India, unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines Ltd., has a total debt of 600 billion rupees ($8.2 billion) and loses 200 million rupees every day, the South Asian country’s Despite the increasing budget deficit, there is pressure on government finances. .
A finance ministry spokesperson declined to comment.
Potential bidders for the airline – identified by local media as the conglomerate Tata Group and owner of local budget carrier SpiceJet Ltd – may welcome any assurances from the government on not facing any surprises on further liabilities.
Cairn, which last year won an arbitration award for more than $1.2 billion in interest on a controversial retrospective tax demand from the Indian government, has called Air India in a US court “an alter ego” of the country, and called it the government’s liabilities. held responsible for. , including any arbitration award. Dewas Multimedia Pvt.
India last month approved legislation that would give relief to firms from tax demands if they agreed to drop litigation. Revenue Secretary Tarun Bajaj said in a later interview that the government was in talks with Cairn to resolve the dispute.
This story has been published without modification in text from a wire agency feed.
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