The timeline for disinvestment for government’s marquee disinvestment like Air India and BPCL may be pushed by two to three months due to the impact of the second wave of coronavirus.
However, the government is confident of wrapping the sale of the two companies by FY22 and meet the disinvestment target of Rs 1.75 trillion has been set through the sale of government stake in strategic core and non-core PSU sectors.
“There may be minor disruptions in short term targets like quarterly targets of disinvestment but there are no change in the annual disinvestment target,” a government official said.
Sources said that bidders shortlisted for the sale of Air India have asked the government to postpone the deadline of submitting financial bids as they are facing issues with due diligence of sites.
With a second wave of the pandemic gripping India, multiple countries have banned flights to and from India in order to stop the spread of the virus. This is impacting travel of merchant bankers and lawyers many of whom are not being able to travel.
“Much of the work can be done online as the virtual data room can be accessed from anywhere. However, a lot of the process also depends on physical verification of sites and properties which is currently not possible. Multiple of our team member who are involved in the process are also sick and are on leave,” said a person involved in the process.
The government has commenced the process of inviting financial bids for the sale of Air India, with the deal expected to be completed by September this year.
Tata Group was among several companies that had put in initial bids to buy the loss-making national carrier in December last year.
After assessing the preliminary bids, eligible bidders were allowed access to the Virtual Data Room (VDR) of Air India, after which investors' queries were answered, sources told PTI, adding that the transaction has now moved to the financial bidding stage and that the deal is likely to be completed by September this year.
The government is selling its entire 100 per cent stake in Air India and its subsidiary Air India Express which has been in losses ever since its merger with domestic operator Indian Airlines in 2007.
The strategic disinvestment of BPCL has moved one step forward with the completion of the sale of Numaligarh Refinery. Interested parties are soon expected to be invited for financial bids. Same is the case with Shipping Corporation of India. However, the official was not sure when this will happen, given the uncertain times.
In 2020, many of these strategic sales got stuck, including the one of Shipping Corporation, due to the nationwide lockdown. Investors from Singapore and Hong Kong had held multiple rounds of virtual meetings, but the deal could not go through. The corporation though is in the second stage of disinvestment and has received several bids for sale.
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