Government may reset its divestment targets for FY20

NEW DELHI: The Centre is likely to keep divestment of big companies on hold and recaliberate its targets, especially since it had to extend the deadline to bid for Air India for second time in a row due to the pandemic situation.

It had on Tuesday extended the deadline for submission of Expressions of Interest (EoI) to bid for Air India by two months to June 30, given the ongoing nationwide lockdown. The date was earlier extended to April 30 from March 17.

“The aviation sector is badly hit and investors’ sentiment is low. So, it was decided to extend the date for submission of EoI again to June 30,” said a senior finance ministry official.

Under the current terms, the successful bidder will have to absorb Air India’s `23,286.5 crore debt, which is not quite lucrative given that aviation is hit the worst due to the virus outbreak.

It’s not just Air India, the divestment of even BPCL and other firms are likely to be put on the back burner. Strategic disinvestments of Air India and BPCL are crucial for the Centre to meet its `2.1 lakh crore target in FY 21.

Last month, the Centre had extended till June 13 the last day for submission of EoIs for the government’s 52.98 per cent stake in BPCL.

It has already deferred a number of Offers for Sale  of PSUs, such as those of CIL, SAIL, NMDC, PFC, IRCON and HAL.