The government said on Monday it plans to sell its entire interest in Air India Ltd, in a renewed push to sell the airline after an attempt to auction a majority stake almost two years ago failed to draw any bids.
A document released on Monday showed March 17 as the deadline for submission of initial expressions of interest, and that any bidder must assume liabilities including 232.87 billion rupees ($3.28 billion) in debt.
Substantial ownership and effective control of the airline must remain with an Indian entity, the government also said.
The potential sale of an airline kept aloft by a $4.2 billion 10-year bailout in 2012 comes as the government divests of money-losing assets to manage the fiscal deficit.
The latest offer should garner significant response partly because it involves a clean exit by the government, said CAPA aviation consultancy India head Kapil Kaul.
“As the entire debt excluding aircraft debt is taken out of the deal, it signals a very determined effort to exit Air India to allow taxpayers’ funds be utilised for the government’s social agenda,” said Kaul.
The government in 2018 wanted to sell 76% of Air India and offload about $5.1 billion of its debt, with terms including the retention of all employees.
InterGlobe Aviation Ltd’s IndiGo and Jet Airways Ltd – which has since collapsed – initially showed interest but opted out after the terms were disclosed.
Steel-to-autos conglomerate Tata Group, widely viewed as a potential suitor for Air India, also decided not to bid after deeming the terms too onerous, sources told Reuters at the time.
A successful bidder would win control of Air India’s 4,400 domestic and 1,800 international landing and parking slots at Indian airports, as well as 900 slots at airports overseas.
It would also get 100% of low-cost arm Air India Express and 50% of AISATS, which provides cargo and ground handling services at major Indian airports, the bid document showed.
The buyer would also have to provide 3% of the value of the airline’s equity as stock options for permanent employees.
Air India has about 9,400 permanent employees and 3,600 fixed-term contract staff – including 1,850 pilots and 4,600 cabin crew – with benefits such as discount air tickets and pensions.
Its employees protested against the 2018 sale attempt, and it was not immediately clear if they would also resist the latest effort. The government said it will provide details on safeguarding employee interests in its final bid document.
A spokesman for the airline’s employee union did not have immediate comment.