The Indian government seems to be finally getting the message over its stalled plan to sell off Air India.
It is mulling waiving the condition that any winning bid for Air India takes on about $3.3 billion of its debt.
According to people with knowledge of the matter, government officials may drop the condition of absorbing the debt, which has been the main barrier to a deal in two long-drawn out attempts to sell the airline.
Bloomberg reports advisors have urged the government to drop the condition as it has deterred serious bids.
Instead, bids should be based on the airline’s enterprise value, sources say.
The government had already sweetened the deal by shifting nearly two-thirds of Air India’s debt into a separate business entity but the remaining $3.3 billion is still a deal-breaker.
Before the pandemic the airline owed nearly $8.5 billion, and hasn’t turned a profit for more than a decade.
However, it does have some valuable assets such as a large fleet of aircraft and lucrative slots at London Heathrow and other airports
Written by Ray Montgomery, Asia Pacific editor
