Indian government makes second attempt to sell debt-laden Air India

Asia News

Visitors disembark a Boeing Co. 787 Dreamliner aircraft, operated by Air India Ltd., on display during the India Aviation 2014 air show held at the Begumpet Airport in Hyderabad, India.

Dhiraj Singh | Bloomberg | Getty Images

The government of India is once again attempting to sell its stake in the country’s flag carrier Air India.

The deal would see a new owner take control of 121 aircraft in its fleet and the current management setup.

At present, the total debt of the airline is estimated at around 60,000 crore ($8.3 billion.) One crore denotes ten million rupees. Any buyer would need to assume around $3.3 billion in debt — a figure calculated to match the assets for sale.

The government has set March 17 as the deadline for any interested party looking to submit interest.

As part of the sale, Air India would also lose its stake in low-cost airline Air India Express and give up its 50% stake in a ground handling services joint venture it currently operates with Singapore Airlines.

India’s government has sweetened the deal since its first attempt to sell the airline less than two years ago. In 2018, officials failed to sell a 76% stake in Air India due to a lack of interest.

The country’s aviation minister has previously said the government would have to shut the airline if it fails to find any buyers.

Speaking Monday, Hardeep Singh Puri told reporters that the Indian budget would subsidize its continued operation until a buyer was found, adding that there was a lot of interest in the airline and terms of sale could be revised.

Audit firm EY has been appointed as the transaction advisor for the latest attempt to sell Air India.