The Government on Monday announced sale of 100 per cent stake in debt-ridden Air India as it issued the preliminary bid document for the strategic disinvestment.

The Government of India (GOI) has given ‘in-principle’ approval for strategic disinvestment of Air India (AI) by way of the transfer of management control and sale of 100 per cent equity share capital of AI held by GOI which will include the national carrier’s shareholding interest of 100 per cent in AIXL and 50 per cent in AISATS.

The deadline for submission of Expression of Interest (EoI) for 100 per cent divestment in Air India and the airline’s stake in low-cost unit Air India Express and airport services company AISATS is March 17, according to a preliminary information memorandum issued by the disinvestment department or DIPAM.

Management control of the airline would also be transferred to the successful bidder.

This is the second time in less than two years that the government has come out with a proposal for selling stake in Air India, which has been in the red for long.

Since the huge debt had proved unattractive for potential bidders, now, the government has relaxed bidding norms to coax investors to buy the airline. The bidding party will have to bear with only Rs 23,286 crore of the total Rs 60,000 crore debt of Air India.

As for eligibility, the lead member of a consortium can have 26 per cent shareholding. The earlier criterion set a holding of 51 per cent in a consortium. The minimum shareholding in a consortium has also been eased to 10 per cent, potentially enabling more entities to bid as part of a consortium.

The net worth for eligible bidders has been relaxed to Rs 3,500 crore from Rs 5,000 crore.

Air India Express is a wholly-owned subsidiary of Air India. The airline owns 50 per cent of AISATS. Individuals and consortia can bid for the airline.

In 2018, the government proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players. However, there were no bidders.

As per fleet details, Air India has 47 wide-body aircraft and 78 narrow-body jets. Out of 125 aircraft, the airline owns 52 aircraft with remaining planes being on finance lease, dry lease and sale and leaseback terms.

Air India has 30 of its aircraft grounded with 15 either not operating or not part of AOC. Air India Express owns 8 aircraft while the remaining being on dry lease or finance lease.

The BJP government has decided to completely exit Air India as it does not want to provide any further financial support to it and instead direct the funds towards building social infrastructures such as hospitals, schools and roads.

The national carrier has been surviving on a Rs 30,000 crore bail-out package cleared by the UPA-II government in April 2012.

(With agency inputs)