The government has started to take further steps towards divesting its stake in the state-owned airline, Air India. It has also begun to discuss proposals for sweetening the deal by allowing relaxations in the bidding process for prospective bidders.

A significant reduction in the debt has been considered by the government through the bidding process to be based on the enterprise value and some other options, said a senior government official.

“There are a few options on the table (enterprise value). Some relaxations have to be given; restructuring of the transaction will have to take place since some investors don’t want things to be fixed. Maybe, start with the expressions of interest (EOI) and decide (on the value) before financial bids are closed, but we will have to take a call on that,” said the government official.

The government of India has also reduced the debt of Air India (AI) from Rs 62,000 crore to Rs 23,286 crore for making the airline to be more attractive for investors. The government is unlikely to reduce the debt of AI further as the reduced debt is against assets.

Due to the COVID-19 pandemic, many businesses across the globe have been impacted including the aviation industry, the interest in Air India privatisation has not been satisfied that led to the extension in the deadline period for the submission of interested bids once more.