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Centre to invite Air India bids based on enterprise value
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SME Times News Bureau | 30 Oct, 2020
In an aggressive push to off-load its stake in the national carrier, the
Centre has decided to invite bids for Air India, based on the company's
enterprise value.
The change in criteria will allow for the
bidding to take place on the current value of the assets and other
resources of Air India.
The deadline for the bid submission has also been extended.
"The
enterprise value shall mean combined value of 'debt' and equity of AI
as assessed by bidder in its financial bid," said an official document
by the Department of Investment and Public Asset Management (Dipam).
The
announcement was made by Civil Aviation Minister Hardeep Singh Puri
here on Thursday. He said: "We have decided to ask for bids for Air
India on enterprise value."
Besides, Puri said the deadline for submitting the bids has been extended to December 14 from October 30.
Similarly, the deadline for announcing the name of those short-listed has also been extended.
The new date for announcement of short-listed bidders is December 28.
On
its part, the Dipam issued the ninth corrigendum to the global
invitation for Expression of Interest (EoI) for the proposed divestment
of Air India.
"On the date of closing of the 'Proposed
Transaction', debt which is lower of outstanding debt of AI and debt of
AIXL combined and 85 per cent (or such other lower percentage as may be
opted by the 'Confirmed Selected Bidder' in its financial bid) of the
enterprise value quoted by the confirmed selected bidder, will remain
as debt with AI and AIXL combined (Retained Debt)," the Dipam document
said.
"The remaining debt will be allocated to AIAHL, in
accordance with a rank order priority of debt, details of which will be
provided at the RFP stage. The allocation of Debt to AIAHL, is subject
to receipt of requisite approvals from lenders, creditors and
regulators, as applicable."
"The difference between the
Enterprise Value quoted and the retained debt, will be paid by the
confirmed selected bidder as cash consideration to the GOI against the
purchase of 100 per cent equity share capital of AI held by GOI."
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