On Thursday, Hardeep Singh Puri, Civil Aviation Minister said rather than equity value, bidding for Air India would be done on the basis of its enterprise value.
The company’s enterprise value includes equity value, debt as well as cash with the company. Equity value measures the value of a company’s shares. in the press conference, Mr. Puri said, “We have decided to ask for bids for Air India on enterprise value,”.
“The bid will be on the enterprise value… In this enterprise value also, a ratio has been earmarked between how much he (the bidder) can take as debt and how much he has to give as cash.” at the conference, Pradipsinh Kharola, Aviation Secretary said.
Mr. Gharola explained that whatever enterprise bidder cites, 15 percent of the amount has to be paid to the government in cash, and the remaining 85 percent has to be taken as debt with Air India.
As on March 31, 2019, Air India’s debt was ₹ 58,255 crore. from Air India to a government-owned special purpose vehicle, Air India Assets Holding Company Limited (AIAHL), a debt of Rs 29,464 crore was transferred, in 2019.
After its failed attempt in 2018 to sell Air India, the government resumed the divestment process in January this year and invited bids to sell its 100 percent equity to the state-owned airline, including Air India 100 percent stake in Air India Express Limited. 50 percent in Air India SATS Airport Services Pvt