According to a report, the government may receive around Rs 15,000 crore from the sale of Air India, its subsidiary Air India Express and AISATS.
Potential bidders are attributing zero value to the equity of the financially troubled company, with the Tata Group deemed to be a frontrunner for taking over Air India.
The Tata Group is ahead of all in the race to acquire Air India.
This is the government’s second attempt to privatize Air India, a plan that has been delayed due to the COVID-19 pandemic.
Meanwhile, bidders are hesitant to ascribe any substantial value to intangible assets such as bilateral rights and airport slots, otherwise considered prime, a source told the Business Standard.
“Unlike airports like Heathrow, slots cannot be traded in India. It becomes intangible as value of such assets depends on how a bidder is willing to use it,” the source added.
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Further, the value of wide-body aircraft like Boeing 787 and 777 and older generation aircraft like Airbus 320 and Boeing 737 has declined due to the pandemic, the report said.
“The suitors’ plans revolved around doing sale and leaseback of Air India’s owned aircraft and earn liquidity. But with the pandemic, the new owner may not require those aircraft or good value for those in the lease market,” according to a report.