New Delhi: Prime Minister Narendra Modi’s government is close to inviting financial bids for flag carrier Air India Ltd., moving toward the sale of an airline that’s surviving on taxpayer money, Civil Aviation Minister Hardeep Puri said.
The financial offers are expected to come in within 64 days from the date of request, he said, addressing the Times Network India Economic Conclave Friday. The process is likely to be completed by May or June, he said.
Bloomberg reported on the plan earlier Friday, citing people familiar with the matter.
“It’s a question of taking the decision and handing over the airline,” Puri said, without giving details of the bidders who made the initial shortlist.
India’s Tata Group and SpiceJet Chairman Ajay Singh have been shortlisted to bid for the carrier, local media reported this week. An invitation for financial bids will be a progress for Modi, who has failed previously to sell the enterprise that has been rescued by the government multiple times in the past decade.
The government loses Rs 200 million ($2.8 million) everyday on the carrier, Puri said. Air India’s cumulative debt stood at Rs 600 billion, he said.
“This time we decided there is no choice,” he said, adding: “We either privatize or we close the airline down.”
The sale is also key for Finance Minister Nirmala Sitharaman, who is seeking to raise money from asset sales to arrest a budget deficit that widened to a record due to steps to fight the pandemic.
Air India on its part has set up teams to facilitate bidders to evaluate different aspects of the airline, the people familiar said.
Tata and Singh will submit bids after completing due diligence of Air India, the Times of India newspaper reported earlier this week.
The security clearance for the shortlisted bidders will proceed simultaneously after the government invites financial bids, the people said, asking not to be identified, citing rules. – Bloomberg