Air India
An Air India Boeing 777-300ER | Commons
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No bidder came forward to purchase 76 per cent of Air India Ltd., which was offered along with its $5 billion debt.

Prime Minister Narendra Modi’s offer to sell flag carrier Air India attracted zero interest from investors, dealing a blow to his government’s most high-profile privatization plan, aimed at disposing of the money-losing company.

As the deadline to show initial interest expired Thursday, no bidder came forward to propose purchasing 76 percent of Air India Ltd., which was offered along with $5 billion debt, Aviation Secretary R.N. Choubey told reporters in New Delhi. “We were certainly looking forward to better participation than this,” Choubey says.

India will start the next decision process on Air India stake sale in two weeks, Choubey said. Earlier, a person familiar with matters told reporters the government will decide the future course of action in the next few days.

The government will review the sale proposal after the failed attempt and make any changes, if needed, Economic Affairs Secretary Subhash Chandra Garg said separately.

The failure is a set back to Modi’s effort to burnish his credentials as a reformist, trying to steer the state away from running businesses, ahead of national elections due next year. The lack of interest also means the government is stuck with an enterprise that has survived on taxpayer money for the past decade, ever since its merger with another state-run carrier Indian Airlines.

Interested parties balked at the terms when the government made it clear that it didn’t wish to sell Air India in parts. IndiGo, the nation’s biggest airline and an early suitor, pulled out in April this year. Some media had reported that Singapore Airlines Ltd., Qatar Airways Ltd. and conglomerate Tata Group were potential bidders, but none of them showed interest before the deadline expired.

The finance ministry, while announcing it would sell 76 percent of Air India, also said the buyer needs to absorb two-thirds of the airline’s $7.8 billion debt.

Air India’s fleet includes more than 100 Boeing Co. and Airbus SE aircraft that make more than 2,300 local flights weekly to 54 airports. It has 2,543 landing slots at airports including New York, London, Paris and Tokyo. -Bloomberg

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1 Comment Share Your Views


  1. One fears there will be no serious buyer for Air India. Asking the successful bidder to absorb $ 5 billion of debt is a complete deal breaker. The 26% retention of shares by the government is meaningless. This is not Hindustan Zinc, where a company valued at 400 crores at the time of disinvestment is now worth 2 trillion and the government’s stake is valued at 55,000 crores. 2. Since this is the last year of the present term, the government will simply go through the motions. Either greatly simplified terms of disposal may fetch a buyer or the airline will have to be shut down, with its assets being sold piecemeal. That will be a pity, since the brand will cease to exist. 3. Willy nilly, the debt will be taken over by the government, which will also give its employees a fair severance package. Not being able to complete a single disinvestment will show up on the Report Card.


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