The Indian government’s attempts at selling off Air India have not kicked off very well as per reports. The roadshows were held in London and Singapore aimed at attracting prospective investors on the airline’s background and lay the pitch.
Roadshows in Singapore and London, held to ascertain investor interest for the debt-laden national carrier Air India, received a lukewarm response from potential bidders, three top government officials aware of the development told Economic Times. However, that’s not likely to disrupt the government’s privatisation plan schedule.
There were only very few people who showed interest in the deal. The release of the EoI document once the holiday season ends in some of the developed markets overseas may see more interest being displayed.
The government has learnt from its previous attempt partial liquidation of its holdings in the national carrier, which drew a blank. Those interested in making any investment wanted full control or nothing. Secondly, none want to have anything to with the debts Air India was carrying. The government has since transferred the non-asset-based credits to a separate special purpose vehicle.
The government had earlier held a roadshow in Mumbai, and it is reported that the response there was better than the ones found in the two overseas destinations.
With 100% of the equity on offer and the remaining debts on the books of the airline backed by assets like the aircraft and the slots at various Indian and overseas airports should make it attractive for the bidder. The government may have to deal with a situation where an existing airline bids for Air India, as per the FDI norms in vogue, no foreign entity can hold more than 49% equity in an Indian airline if that entity is already owning or operating an airline. There will have to find a local partner to work with.