New Delhi: The government has extended the bidding deadline for Air India Ltd to 30 April, the department of investment and public asset management (DIPAM) said on Friday.
The earlier deadline to submit expression of interest (EoI) was 17 March.
The Centre has also extended the last date for the response on queries related to Air India’s preliminary information memorandum (PIM) from 16 March to 20 March, said DIPAM, which falls under the ministry of finance.
The extensions come against the backdrop of the Covid-19 outbreak, which has severely hurt the economy, particularly the aviation and tourism sectors, and investment sentiments across the world.
The spread of the virus to more than 100 countries has hit the travel and hospitality industry the hardest, with countries imposing both inward and outward travel bans.
Additionally, Brent crude was down to $33 per barrel on Friday after Saudi Arabia and the United Arab Emirates announced plans to boost production capacity.
The government, which aims to divest its entire stake in Air India, had begun the stake sale process in January by inviting offers from potential investors, after the failure of a costly turnaround plan and an earlier effort to sell a controlling stake in the national carrier.
To sweeten the deal, the Centre has also reduced Air India’s debt from about ₹56,334 crore to about ₹23,287 crore.
The cabinet, headed by Prime Minister Narendra Modi, had recently approved an amendment to the foreign direct investment (FDI) policy to permit FDIs of up to 100% in Air India by NRIs under the automatic route.
The viral outbreak gives the Indian government more time to prepare for the sale, said Lewis Burroughs, head of aviation, India, ICF, a global consultancy.
“In terms of market appetite, investors could be cautious during the next two quarters or so. However, with the government keen to privatize the airline, the divestment of Air India should happen in the future,” Burroughs said.