The Indian government has decided to sell a 76% stake in Air India under the carrier's privatisation programme.
A preliminary information memorandum shows that Air India, Air India Express and a 50% stake in Air India SATS Airport Services will be sold as a combined entity.
Air India Engineering, Alliance Air and Air India Air Transport Services will transferred to a separate special purpsoe vehicle and will not be involved in the transaction. A demerger or "other appropriate mechanisms" will be used to dispose of those businesses before the sale of Air India closes.
Documents show that New Delhi has approved Indian and foreign companies to bid for Air India. Interested parties are also required to have a minimum net worth of Rs50 billion ($750 million) and demonstrate profitability over the last three financial years.
Indian carriers with zero or negative net worth will be allowed to participate in the process, provided they form a consortium with other partners and hold a 51% stake in the consortium.
Local media reports indicate that IndiGo has the highest net worth of about Rs38 billion. Other reportedly interested carriers such as Jet Airways, SpiceJet and Vistara have a negative net worth, following several years of retained losses.
The Star Alliance carrier holds total debts of over Rs488 billion, and prospective buyers will have to take on around half of the debt, and Rs88.2 billion of current liabilities.
The documents did not specify if prospective bidders will be forced to retain Air India's workforce, but notes that the group has nearly 38,000 employees.
Ernst & Young is advising New Delhi on the sale.
Interested parties have until 14 May to submit expressions of interest, with qualifying bidders to be announced on 28 May.
No expected date for the transaction to close was included in the documents, but it is expected to be completed before the end of the year.
Source: Cirium Dashboard
