E-Paper
Govt extends deadline for Air India bids by 2 months
The latest decision by the government comes amid the lockdown to contain the covid-19 outbreak, which has severely hurt the economy.
The government has extended the deadline for submitting bids for Air India Ltd to June 30. The earlier deadline to submit expressions of interest (EoI) for the national carrier was April 30.
The latest decision by the government comes amid the lockdown to contain the covid-19 outbreak, which has severely hurt the economy. The changes were made following requests from interested bidders in view of the prevailing situation arising out of the pandemic outbreak, the Department of Investment and Public Asset Management (DIPAM) said in a notification.
A senior finance ministry official said that the government has time till March 31, 2021 for the privatisation processes of public sector firms such as Air India and Bharat Petroleum Corp. Ltd. The government would prefer to extend the deadline of the privatisation process rather than deferring it to a later date, the official added, requesting anonymity.
However, experts tracking divestment said that there are likely to be valuation and market demand concerns with Air India and BPCL divestments as aviation, oil and gas sectors have been severely impacted by lockdown initiated by governments across the world to contain covid-19.
“What will be important for the government is receiving the right kind of bids which can lead to closing the deals once the economy and market dynamics show signs of stabilisation,” said Dipti Lavya Swain, corporate M&A lawyer at HSA Advocates.
The government, which aims to sell its entire stake in Air India, had in January began the stake sale process by inviting offers from potential investors after a costly turnaround plan and an earlier effort to sell a controlling stake in the flag carrier failed.
