Govt plans global roadshows for AI disinvestment
NEWDELHI: The government plans to hold road shows for Air India Ltd within the country and abroad as it prepares to sell the airline, shows its tender inviting applications for advisers for the strategic disinvestment.
One of the tasks outlined in the government’s detailed tender inviting proposals from advisers for the disinvestment in Air India and its subsidiaries is “conducting road shows in India and abroad” .
The road show clause indicates the government is conscious that there would be international interest in Air India and could change the rules that currently restrict international airlines from bidding for the national carrier.
The government also seems to be aware the valuation of Air India and its brand will be a tricky task. It has noted in the tender that while the selected adviser would assist in fixing the range of the fair reserve price— considering the valuation of the Air India group based on methods including but not limited to discounted cash flow, relative valuation, replacement cost method, among other things— the government will have the option of getting another agency to do the valuation.
The merchant bankers will advise and assist the government on the modalities of strategic disinvestment and timing, and positioning of the strategic sale. The bidders need to have at least five years of experience in providing similar advisory services for disinvestment, strategic sale, merger and acquisition activities, private equity transaction etc., and should have advised, handled and successfully completed at least one transaction of merger/acquisition/takeover/strategic disinvestment/private equity transaction of the size of ₹4,000 crore or more between April 2012 and June 30, 2017.
The bids have to be sent by October 12 and a pre-bid meeting will be held on September 25 at the Department of Investment and Public Asset Management (DIPAM), under the finance ministry.
The tender also indicates that a special purpose vehicle (SPV) could be created. The airline’s unsustainable debt of ₹30,000 crore and its land assets could be parked in the SPV, people close to the ongoing sale proceedings have said.
Outlining what will be on offer, the tender says the Air India group operates to 42 international destinations and more than 70 domestic stations with a fleet of 142 aircraft comprising 65 Airbus A-320, 15 Boeing B777, 24 Boeing 787, 23 Boeing 737-800, 11 ATRs and 4 B747 aircraft.
The airline is 100% owned by the government of India and its share capital as on March 31 was ₹24,425 crore, while authorised capital was ₹30,000 crore.