The Government has set Rs 5,000 crore as the minimum net worth criteria for those seeking offer for obligation ridden Air India, a media report said. Government sources had before expressed that the net worth criteria would be settled at Rs 1,000 crore. However, as indicated by The sources, the Government has assessed the total assets criteria with a specific end goal to square trivial and questionable contenders.
“The minimum net worth criteria for companies or consortiums bidding for Air India has been set at Rs 5,000 crore. But to allow participation from domestic airlines — many of which have negative net worth — it has also been decided to allow them to bid provided they form a consortium that has a net worth of over Rs 5,000 crore,” a senior government official told the newspaper.
Government Fixed Rs 5000 Cr as Minimum Net Worth for Air India Bidders
On 19 March, a report announced that the Core Group of Secretaries on Disinvestment (CGD) had recommended that an organization with a demonstrated reputation of running a fruitful carrier be permitted to offer, regardless of whether its net worth is negative.
“The committee of secretaries opined that aviation as an industry often has to withstand external economic or market downturns and long periods of revenue losses or low profit margins, which can result in a negative net worth despite the airline’s operating performance being strong,” an official was quoted.
The Government is wanting to execute the disinvestment procedure of the pained Air India group in stages, and separate expressions of interest (EoIs) will be issued for every entity under the company. EoIs are probably going to be issued before the month’s over. The Government will commence the activity with the offer of the parent carrier and Air India Charters, which works minimal effort flights under the Air India Express brand.
In June 2017, the Cabinet Committee on Economic Affairs (CCEA) gave its on a basic level endorsement for the vital divestment of Air India, which has an obligation weight of over Rs 50,000 crore. The Government hopes to finish the privatization of Air India this year and is wanting to hold a 24 percent stake in the debilitated transporter. It intends to part the aircraft into four unique elements and plans to offer every entity.