The Indian government has said the buyer of 76 per cent government holding in Air India will enjoy benefits of bilateral rights and slots at all airports that the national carrier currently enjoys, while extending the deadline for submission of expression of interest (EoI) by a fortnight to May 31. Responding to 160 queries raised by potential buyers, the government clarified that individuals will not be eligible to bid but indicated that bidders may be given flexibility to change consortium partners until the submission of financial bids.
It promised complete freedom in managing the airline, adding that code share arrangements can also be reworked. The statement also made it clear that the government will only be present as a minority shareholder, given that 24 per cent stake does not give it veto powers. Several interested players and a large section in the government, are keen that the Centre has only a limited role in operations of the company. The government, however, said it won't provide guarantee to AI after disinvestment. The debt-laden airline has managed to access cheaper funding, and also finance aircraft acquisition, based on a sovereign guarantee.
Bidders are currently barred from selling AI shares or ceding management control for a stipulated period. The “lock in” restriction does not rule our fresh issue of capital. In-depth terms for fundraising will be provided in subsequent phase, clarifications released in the nature of questions and answers said.
Asked about the extension of deadline, the sources said there were several holidays since the document was first released in March-end, both in India and abroad, and the extension was based on request from “interested parties”. To a query related to staff, the government said, “employee concerns are being suitably addressed”. While noting that currently there is no VRS (Voluntary Retirement Scheme) for AI, the government said employees are eligible for gratuity on completion of five years of service or more and the same is capped at Rs 20,00,000. The divestment includes profit-making Air India Express and AISATS, an equal JV between the national carrier and Singapore-based SATS.
