Air India disinvestment EOI deadline extended

After poor response from Indian carriers to the Air India (AI) disinvestment, the government on Tuesday extended the deadline for submitting the Expression of Interest (EoI) for entering the bidding process to May 31 from May 14.

The announcement to divest 76% of stakes in AI came on March 28 with May 14 deadline submitting bids and promise to announce the qualified bidders on May 28. As per the new schedule, the list of qualified bidders will come only on June 15.

There is no official word on the reason for extension. The Indian carriers have not shown interest in the bidding process and market leader IndiGo and Jet Airways made it public that they are not in the race. Tata Group, which runs Vistara and AirAsia India in joint venture, also appears not to be keen to take part in the bidding process.

The lukewarm response from the Indian and foreign operators have dampened the spirits in the government and it has led to the rescheduling of the process.

The Ministry of Civil Aviation also made public its responses to clarifications sought by the interested bidders on its EoI. There were 160 queries seeking clarity on the initial terms.

To questions on the government retaining 24% stake in the national carrier, the MoCA said it was a "considered decision" to divest 76% stake and retain a 24% stake. It also said In addition, the ministry clarified that ESOPs (employee stock ownership plan) will also be provided from government's shareholding.

Asked about its rights, the MoCA said the government would have "rights similar to that of a minority investor" as per Companies Act and as per Shareholders' Agreement.

It also said no preference is being proposed to be given to the confirmed successful bidder for Air India in the disinvestment process of the remaining entities, which are currently part of Air India Group.