After unsuccessfull bids in the past, know how Air India sell-off will be carried out

The process of selling Air India has started. The government had asked the companies interested in

buying it to express their interest in the auction. Many companies have submitted EOI till 5 pm on

December 14. This auction process has now reached the second stage. In 2018, which was not sold

even after the efforts of the Air India government, it seems that it will be sold now. However,

aviation experts are not very enthusiastic about it right now.

Aviation expert Harshvardhan told Bhaskar that this is not the first attempt by the government to

sell Air India. Anyone can put EOI. The real picture will start to clear after January 5. Many bidders

have already left the process at the last moment, so only after January 5 will it be known how many

companies are eligible for bidding. The financial offer of the companies will then depend on their

negotiation with the government as to what happens next.

Why is Air India selling?

The company is running at a loss. In 2018-19 alone, the company incurred an operational loss of Rs

4,424 crore. Meanwhile, the company had an operational loss of Rs 1,245 crore in 2017-18. The

company has incurred a debt of more than Rs 62,000 crore due to continuous losses. Given the

condition of the company, the government has already tried to sell it. In this attempt in 2018, Air

India did not find any buyer.

Why the auction could not be completed in 2018?

In 2018, the government had offered to sell a portion of the debt with a 76% stake in the company,

but no buyer was found due to Air India's losses and government terms. Last year, Aviation Minister

Hardeep Puri had said that if Air India could not be privatized, there would be no other option but to

close it.

What changes did the government make in this auction?

1. This time the government is auctioning 100% stake in the company. That is, no share of the

company will remain with the government.

2. Out of the debt of more than Rs 60,000 crore on the company, the buyer will have to repay

only Rs 23,286 crore. The rest will be repaid by the government.

3. The net worth of the company participating in the auction should be Rs 3,000 crore. In 2018,

it was Rs 5,000 crore.