Air India bid cutoff delayed again; bidders to decide debt

India’s government opted once again on October 29 to push back the deadline for submitting bids to buy a 100% stake in Air India (AI, Mumbai Int’l) from the following day, October 30, to December 14, the Ministry of Civil Aviation announced in a statement. The ninth “corrigendum” to the memorandum inviting Expressions of Interest (EOIs) in the sale, posted on the ministry’s website, concluded with the sentence: “The above changes are in view of the prevailing situation arising out of Covid-19.” While EOIs must be submitted by 1700L (1130Z) on December 14, the date for the department to come up with a shortlist of approved bidders has also been extended, to 1700L (1130Z) on December 28, the statement said. Initially, the final date for bids was set for March 17, which was then prolonged to April 30, then again to June 30, to August 31, to October 30, and now to December 14. On October 19, Tuhin Kanta Pandey, secretary of the Ministry of Finance’s Department of Investment and Public Asset Management, revealed that the government was likely to allow potential buyers to decide how much of the carrier’s debt they want to take on as part of their bids. “We will remove the constraints that the current structure of the transaction poses for investors,” he told the Hindustan Times. “We are now thinking of letting the market determine the level of debt. That means we don’t freeze it.” At the moment, any bidder would have to take over USD3.3 billion in debt, as the flag carrier has been unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines (IC, Delhi Int’l). “It is very difficult for the government to keep on sustaining Air India, but winding it up could be disastrous,” Pandey said. “The only course now is to proceed toward disinvestment.”