India News | Bidding for Air India to Be Done on Enterprise Value: Puri

New Delhi, Oct 29 (PTI) Civil Aviation Minister Hardeep Singh Puri on Thursday said bidding for Air India would be done on the basis of its enterprise value instead of equity value.

Enterprise value of a company includes the equity value, debt as well as cash with the company. Equity value measures the value of a company's shares.

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"We have decided to ask for bids for Air India on enterprise value," Puri said at a press conference.

Aviation Secretary Pradeep Singh Kharola said at the conference, "The bid will be on the enterprise value... In this enterprise value also, a ratio has been earmarked between how much he (bidder) can take as debt and how much he has to give as cash."

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It has been decided that whatever enterprise value the bidder quotes, 15 per cent of that has to be given in cash to the government and remaining 85 per cent has to be taken as debt along with Air India, Kharola explained.

The debt of Air India as on March 31, 2019 was Rs 58,255 crore. Later in 2019, Rs 29,464 crore of this debt was transferred from Air India to a government-owned special purpose vehicle called Air India Assets Holding Company Limited (AIAHL).

After its unsuccessful attempt to sell Air India in 2018, the government in January this year restarted the divestment process and invited bids for selling 100 per cent of its equity in the state-owned airline, including Air India's 100 per cent shareholding in Air India Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)