Govt clarifies AI sale rules, extends deadline to May 31
MUMBAI: The government on Tuesday extended the privatization process of Air India by a fortnight and clarified various knotty issues identified by potential bidders.
Expressions of interest (Eois) for the state-owned airline will now be accepted till May 31, against the previous deadline of May 14, and qualified bidders will be announced on June 15, against the previous date of May 28, a corrigendum to the EOI document said.
In a separate document which answers several questions raised by potential bidders, the government said there is no reference in the preliminary information memorandum (PIM) that the winner must mandatorily take the company public within three years. Also, individuals, other than the airline’s employees, will not be allowed to submit bids.
The 19-page document answers questions related to airport slots, bilateral rights and employee rights. The government plans to sell 76% in the airline along with management control. However, the government will have rights similar to that of a minority investor as per the Companies Act and Shareholder’s Agreement, the draft for which will be provided to bidders at the Request for Proposal (RFP) stage. In other words, the government will have no special rights in the airline despite retaining a 24% stake.
Details about safeguarding employees’ interests, call option to buy the government’s stake, renewal of existing slots and bilateral flying rights, new terms for interest-bearing debt and fund raising will be provided during the RFP stage, the govern- ment said. Concerns raised by the airline’s unions and employees are being suitably addressed, it added.
Of the 160 queries received, over 50 will be provided during the RFP stage, the government said. The government also said the sovereign guarantees enjoyed by the national carrier will cease to exist after the privatization. It’s up to the winner to decide what to do with Air India’s planes grounded for various reasons, it said.
A person aware of the development said the matter of conducting an IPO was just a rumour.