EoIs invited for divesting stake in Air India, AIXL and AISATS

The Ministry of Civil Aviation (MoCA) has invited expressions of interest from bidders for the strategic disinvestment of a 76 per cent stake in Air India. Bids have also been called for divesting shareholding interest in two subsidiaries of Air India – Air India Express Limited (AIXL) and Air India SATS Airport Services Private Limited (AISATS). Air India holds 100 per cent equity share capital in AIXL and 50 per cent in AISATS. The last date for submission of bids is May 14, 2018. For bidding, the information memorandum stipulates that foreign bidders must have a minimum net worth of Rs 50 billion and net profit for three preceding years. However, the rule has been relaxed for Indian carriers to enable them to participate in the process. Accordingly, domestic airlines which are part of a consortium do not need to fulfil the three-year profitability criterion. Similarly, a domestic airline with a negative net worth can also bid as part of a consortium, provided its stake is restricted to 51 per cent. The government has also decided to retain its 24 per cent stake in Air India. Post divestment, the new owner of the airline will take on debt of Rs 333.92 billion, while the remaining debt worth Rs 153.89 billion will be transferred to a special purpose vehicle  (SPV). The SPV’s debt will include Air India Engineering Services, ground-handling company Air India Air Transport Services, Airline Allied Services (which operates Alliance Air) and the Hotel Corporation of India. The SPV will also absorb the airline’s real estate assets and will be called Air India Asset Holding Limited.