Friday, October 30, 2020
The government has changed a bidding parameter for airline Air India, allowing potential buyers to quote enterprise value instead of equity value. Simultaneously, the deadline for submitting bids has been extended to December 14 from October 30. Civil Aviation Minister Hardeep Singh Puri said this would entice bidders who till now had constructed the debt amount as a minimum threshold bid amount. The Tata group, which operates two airlines Vistara and AirAsia India, is a favourite for acquiring the national carrier.
“We expect to complete the bidding process by end of December,” Puri said.
The enterprise value of a company includes the equity value, debt as well as cash with the company. Equity value measures the value of a company’s shares. However, the government has mandated that a willing bidder will have to pay 15 percent of his quote as upfront cash payment, disinvestment secretary Tuhin Kanta Pandey said.
