The Central government is planning to announce the winning bid for Air India by October 15. The financial bid for the debt-ridden national carrier is likely to be opened tomorrow, reported CNBC citing sources.
Financial bids will be evaluated against an undisclosed reserve price and the bid offering the highest price above that benchmark would be accepted. The bid will initially be examined by the transaction advisor before the recommendation is sent to the Cabinet for approval.
According to the report, 85% of the bid price will be for Air India’s debt, and 15% will be in cash.
On September 25, Union Minister Jyotiraditya Scindia said the privatisation process of Air India was underway and technical bids were being analysed before the financial bids are opened.
“We have received technical bids and financial bids which are in sealed envelopes. Currently, the technical bids are being scrutinised. Financial bids will be opened only after scrutiny of technical bids,” the Civil Aviation Minister told reporters in Srinagar.
He said the process of privatisation is on and it will reach its culmination. “We will be informing you as we move along the process.”
“As long as the process of scrutinisation is going on, I shall not divulge any details. Till then, you guess is as good as mine,” Scindia added.
The government will sell 100% stake in Air India and its low-cost subsidiary Air India Express, and 50% in ground handling company Air India SATS.
promoter Ajay Singh have officially bid for Air India.
The national carrier and its subsidiary Air India Express may have together been valued in the range of Rs 15,000-20,000 crore by Tata, according to people familiar with the bidding process.
“The valuation is a rough estimate of the assets (aircraft) owned by the beleaguered airline being sold by the government,” said the people cited above.
The board of Tata Sons had given a free hand to its chairman on the bid, mentioning a price range the group would be comfortable paying for the troubled carrier. “The bid is quite within that range mentioned,” an official aware of the matter said.