The Indian Government has called a halt to its plans to sell off the 76 percent stake it holds in troubled state-owned airline, Air India. The reason, simply a complete lack of interest from any viable bidders - yes it seems no-one wants to take on the massive loss-making carrier.
No bidders for Air India
The Indian government confirmed the situation on Wednesday after advising that the sales offer had failed to attract any buyers for the debt-laden national carrier. “We ran a disinvestment process where we made it very clear what type of bid we were interested in receiving. Nobody expressed any interest ... that process right now is over so we have to move forward and consider other alternatives,” Junior Civil Aviation Minister Jayant Sinha told the media at a briefing.
He assured everyone that the government would continue to support the airline’s financial requirements while it worked on alternatives, however, what those alternatives could be or when they might be announced was not disclosed.
The government had been hoping that a sale of its major stake in the loss-making carrier would help cut the national debt and provide funding for some of the nations social reforms in the farming sector.
Air India is a vast and somewhat unwieldy group, currently employing around 27,000 people, it has six different subsidiaries, only three of which are making profits or breaking even. It is believed to have around $1.24 billion worth of real estate a well as other assets of approximately $4.6 billion, yet was still asking for a $148 million loan earlier this month in order to continue with its day-to-day operations.
The total debt the airline owes at the present time is unclear however some fifteen months ago was it was $7.16 billion and is expected to be nearer $8 billion now. With those bills outstanding it is hard to see any possible investor being intereted in taking on Air India as a whole, however there ould be a possibility if Air India is broken up and individual operations and assest are sold piecemeal.
