Bidding for Air India to be done on enterprise value: Hardeep Singh Puri

By: |
October 29, 2020 6:34 PM

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.

It has been decided that whatever enterprise value the bidder quotes, 15 per cent of that has to be given in cash to the government and remaining 85 per cent has to be taken as debt along with Air India, Kharola explained.It also said that contractual obligations cannot be sought to be enforced by way of a writ petition and a civil suit has to be filed.

Civil Aviation Minister Hardeep Singh Puri on Thursday said bidding for Air India would be done on the basis of its enterprise value instead of equity value.

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.

“We have decided to ask for bids for Air India on enterprise value,” Puri said at a press conference.

Aviation Secretary Pradeep Singh Kharola said at the conference, “The bid will be on the enterprise value… In this enterprise value also, a ratio has been earmarked between how much he (bidder) can take as debt and how much he has to give as cash.”

It has been decided that whatever enterprise value the bidder quotes, 15 per cent of that has to be given in cash to the government and remaining 85 per cent has to be taken as debt along with Air India, Kharola explained.

The debt of Air India as on March 31, 2019 was Rs 58,255 crore. Later in 2019, Rs 29,464 crore of this debt was transferred from Air India to a government-owned special purpose vehicle called Air India Assets Holding Company Limited (AIAHL).

After its unsuccessful attempt to sell Air India in 2018, the government in January this year restarted the divestment process and invited bids for selling 100 per cent of its equity in the state-owned airline, including Air India’s 100 per cent shareholding in Air India Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Steel companies supply 56,446 tonne medical oxygen for COVID-19 treatment: Steel Ministry
2Microsoft Teams will stop working for these users starting today; details inside
3Companies fear rise in cybercrimes, frauds in coming years, yet only 5% of them take anti-fraud measures