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Govt may announce Air India winning bidder today – Times of India

NEW DELHI: The government is likely to announce the winning bidder for Air India on Friday.
The state-run carrier could be headed back to the founder Tata Group which has outbid other contenders, a consortia comprising of SpiceJet promoter Ajay Singh.
A panel of secretaries which met earlier this week had fixed the reserve price for the sale and the Tata group is learnt to have emerged as a front-runner.
“They (the Tata group) bid aggressively. A final call will be taken by the Air India specific alternative mechanism,” a source had said recently, referring to the panel of ministers which will decide the winner but did not elaborate.
The sale is likely to be wrapped within this month, the first privatisation of a state-run entity almost 20 years since the then Atal Behari Vajpayee government pushed ahead with a raft of such transactions.
Several attempts have been made to sell off the loss-making Air India in the past 20 years but those attempts had to be aborted due to a string of factors including lack of interest from investors for the cash-guzzling airline.
Almost 21 years ago, an attempt to sell stake in the airline had to be abandoned by then disinvestment minister Arun Shourie after Singapore Airlines, which bid with the Tata group for a 40% stake in the airline, pulled out of the consortium.
In the last one week, the government has set the reserve price for AI which is learnt to be in the range of Rs 15,000-20,000 crore.
Tata’s bid is learnt to be higher than the reserve price and much more than Ajay Singh-led consortia’s bid.
The airline was nationalised in 1953 and if the sale goes through, it is now looking at a home-coming to the Tata group after almost 68 years.
On October 15, 1932, J R D Tata had flown the first-ever flight of Tata Air Services from Karachi’s Drigh Road Aerodrome to Mumbai’s Juhu Airstrip via Ahmedabad on a single engine De Havilland Puss Moth carrying 25 kg of 4-anna airmail letters.
Tata Aviation Service was the forerunner to Tata Airlines and Air India.
The winner will get AI’s intangible assets like 4,400 domestic and 1,800 international landing and parking slots at Indian airports; and 900 slots at airports abroad.
The winner will also get AI Express and AI’s 50% stake in AI-SATS ground handling company.
AI had a total debt of Rs 60,074 crore as on March 31, 2019. The buyer will need to take on debt of Rs 23,286.5 crore.
The remaining amount will be transferred to a SPV, Air India Assets Holding Ltd (AIAHL). The SPV will monetise AI’s assets like property and land bank and use those funds to pay off the debt.
The sale of Air India is expected to spur the government to prompt the government to put other stake sales such as BPCL, Shipping Corporation of India, Concor, BEML on the fast track.