India Govt responds to 160 clarification queries related to Air India disinvestment

1 May, 2018

India's Department of Investment and Public Asset Management released (01-May-2018) a 19 page document on the proposed Air India disinvestment, entitled: "Clarifications sought by Interested Bidders on PIM/EoI for the Strategic Disinvestment of Air India and its Subsidiaries/JV". 160 queries were responded to in the document with the government noting, in relation to more than 50 queries, that details would be provided at the RFP stage. As part of the queries, it was noted that the new buyer can integrate Air India with its existing businesses subject to applicable law. The government also further "clarified that operational synergies span the full range of business activities associated with running a large global airline including... HR policies, operations, sales and marketing, revenue management, procurement and contracting financial management and business strategy". The buyer will meanwhile gain benefits of bilateral rights and slots at all airports that the carrier currently has access to, while current codeshare agreements can be reconsidered. The government will not provide any asset valuation report on Air India to companies interested in bidding for the airline, explaining: "No asset valuation report shall be provided. However, details of the age and maintenance of the aircrafts shall be provided in the RFP stage so as to enable bidders to make their own assessment of the approximate valuation". It was also noted that individuals other than the airline's employees would not be permitted to bid. Related to staff, the government said: "Employee concerns are being suitably addressed". The government also clarified: "Grounded aircraft are assets of Air India. Successful bidder post the strategic disinvestment can deal with them/dispose as deemed fit subject to the terms and conditions of the Shareholders' Agreement". It was also noted that "it is a considered decision by Government of India to retain 24 per cent stake", adding: "The government will have rights similar to that of a minority investor as per the Companies Act and shareholders' agreement". [more - original PR]