ZCZC
BCN-15
INDIA-AVIATION-BUSINESS-AIRINDIA
Zero bidders for debt-stricken Air India as deadline closes
MUMBAI, June 1, 2018 (BSS/AFP) – India’s government announced Thursday that
its auction for a majority stake in its debt-stricken airline Air India had
received no bids.
The cut-off date has already been put back by three weeks because of a lack
of interest from buyers for the beleaguered airline.
“No response has been received for the Expression of Interest floated for
the strategic disinvestment of Air India,” India’s aviation ministry posted
on Twitter as the deadline closed Thursday.
“Further course of action will be decided appropriately.”
Government officials were optimistic of a late offer but aviation analysts
said there was little chance of a successful bid unless the government
changed the terms of the sale.
“We are hopeful the government can find a way to sell stakes in Air India
and may receive multiple offers if the terms of sale are still revised,”
Binit Somaia, South Asia Director at the Centre for Aviation (CAPA), told
AFP.
“The government can keep postponing the dates but the markets have spoken
and there is zero interest. It is back to the drawing board,” another Mumbai-
based analyst told AFP.
The government announced on March 28 its plans to sell up to 76 percent of
the carrier, but airlines and other investors have been spooked by the sale
terms.
India’s Tata Group, Singapore Airlines (SIA), which together run Vistara,
and InterGlobe Aviation Ltd, owner of the Indigo carrier, were all linked to
a takeover but have ruled themselves out.
Indigo wanted Air India’s international operations but the government
refused to carve up the carrier.
Air India, founded in 1932, was once the country’s monopoly airline, known
affectionately as the “Maharaja of the skies”.
But it has been haemorrhaging money for years and it has lost market share
to low-cost rivals in one of the world’s fastest-growing airline markets.
Successive governments had spent billions of dollars to keep it flying
before Prime Minister Narendra Modi’s cabinet last year gave the go-ahead to
a selloff.
Air India is about $8 billion in the red and reported losses of almost 58
billion rupees ($866 million) for the financial year ending March 2017.
BSS/AFP/HR/0948