Govt may set Rs 15-20k cr as Air India’s min price

NEW DELHI: The government is likely to set Air India’s reserve price in the range of Rs 15,000-20,000 crore. Sources said in case the highest bidder’s financial bid is less than the reserve amount, it is still likely to sell off the airline. This call, sources said, has been take due to the amount of fund infusion that will be required to keep AI alive in case the divestment does not get through. The idea is not to make money from the divestment but to stop state funding of the Maharaja.
The reserve price is learnt to have been arrived at after taking into consideration all the assets the buyer would get, such as, slots, aircraft, foreign flying rights, brand value, cash flow, along with the debt burden. AI’s accumulated debt-cum-losses combine is close to Rs 1 lakh crore. The daily loss is about Rs 25 crore.
Transaction adviser EY, along with RBSA Advisors, had made a presentation on the valuation on Tuesday. Tatas have bid through a new company Talace Pvt Ltd. A consortia comprising of SpiceJet promoter Ajay Singh and others has also submitted financial bids.

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