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Govt does not see any likely impact of Cairn Energy lawsuits on Air India disinvestment

The Centre does not see any likely impact of the Cairn Energy and Devas Multimedia lawsuits against Air India Ltd on Air India’s disinvestment, said VK Singh
Govt does not see any likely impact of Cairn Energy lawsuits on Air India disinvestment
Govt does not see any likely impact of Cairn Energy lawsuits on Air India disinvestment
  • The government expects to receive financial bids for disinvestment-bound Air India by September 15, said the minister
  • Singh also said that the moveable assets of Air India will be transferred to the new owners of the national carrier post disinvestment

New Delhi: The Centre does not see any likely impact of the Cairn Energy and Devas Multimedia lawsuits against Air India Ltd (AIL) on Air India’s disinvestment, said Minister of State (MoS) for Civil Aviation VK Singh on Thursday. “There is no likely impact of the lawsuits on the ongoing disinvestment process of Air India Limited. As AIL is a separate corporate entity with its own management and board. The case is being defended by AIL. The company has appointed lawyers to defend its interests,” said the minister in the Lok Sabha on Thursday.

He also added that the government expects to receive financial bids for disinvestment-bound Air India by September 15. “The last date for submission of EOIs was 14.12.2020. Multiple Expression of Interests (EoIs) were received by Transaction Advisor. The EOIs were evaluated by the Transaction Advisor for selection of Qualified Interested Bidders (QIBs). Request for Proposal (RFP) along with draft Share Purchase Agreement (SPA) have been shared with QIBs by the Transaction Adviser on 30.03.2021 for submission of financial bids. The financial bids are likely to be received by 15.09.2021,” Singh told the Lok Sabha in a written response.

Air India disinvestment

The disinvestment process for Air India has seen multiple extension of deadlines so far because of requests received from bidders, citing challenges posed by the COVID-19 pandemic. However, the government has exuded optimism about closing the disinvestment process in FY22. According to sources who spoke to PSU Watch, the biggest name to have thrown its hat in the ring is India’s largest conglomerate, Tata Group. The group has submitted an EoI through AirAsia, where Tata owns a majority stake. 

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Moveable assets of Air India to be transferred to new owners

Singh also said that the moveable assets of Air India will be transferred to the new owners of the national carrier post disinvestment. “Immovable assets are being monetized by Air India to offset the debt of Air India Limited,” the minister said. A special purpose vehicle (SPV) has been set up for warehousing non-core assets of Air India Ltd, named Air India Assets Holding Ltd (AIAHL). “Monetisation proceeds of non-core assets of Air India are to be used to offset the debt of Air India transferred to AIAHL,” said the minister.

Air India has never made a net profit since its merger with Indian Airlines in 2007. The airline recorded a net loss of Rs 7,982.83 crore in 2019-20, Rs 8,556.35 crore in 2018-19, and Rs 5,348.18 crore in 2017-18.

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