The Centre released the Preliminary Information Memorandum (PIM) to invite Expressions of Interest (EoIs) for the strategic divestment of Air India, and its shareholding in Air India Express and Air India SATS Airport Services Ltd, on Wednesday.
Air India holds 50 percent stake in AISATS.
Each member of the consortium has to hold at least 20 per cent share in the consortium and at least 20 per cent equity share capital of the company (special goal vehicle) promoted by the members of the consortium for acquiring the government stake being disinvested.
Laying the ground rules for potential bidders, the government has mandated that the successful purchaser can not sell the shares or cede management control for at least three years from the date of consummation of the transaction.
According to the memorandum, private entities should have a net worth of Rs 5,000 crore to be eligible to send in their EoIs for the proposed transaction.
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The government has laid down the contours for reallocation of the airline's debt component, which is considered by industry and experts to be a spoiler in the disinvestment process.
The Civil Aviation Ministry has asked for Expression of Interest (EoI) for selling its shares in the debt-laden carrier and two of its subsidiaries. This figure is expected to rise by another Rs 3,500 crore by the end of this financial year.
The airline is considered rich picking by many though others feel it could be a drag on the new owners, too.
"As for Air India, I think it's a lovely airline".
Tata Group, which once owned Air India, could reportedly go with Singapore Airlines to bid for Air India. It's a lovely airline and its parameters have also improved. Jet Airways may also go with Air France-KLM to participate in the Air India disinvestment. According to the memorandum, the government plans to offload 76 per cent equity share capital of the national carrier as well as transfer the management control.