With the government looking at options to sell Air India (AI) with zero debt, bidders said the airline would fetch a far better valuation if Rs 5,000 crore of finance cost is knocked off the company’s balance sheet.
“After the zero-debt sweetener, Air India looks attractive as it will be easier to turnaround the airline,” said one of the potential bidders. Though the pandemic has hit the valuations of the airline worldwide, the company will be able to fetch a good bid for the government, he added. In FY19, Air India’s finance cost was Rs 4,896 crore on a debt of Rs 60,000 crore compared to Rs 4,651 crore in FY18. The airline has reported a loss of Rs 2,570 crore in the June quarter of FY21 because of the nationwide lockdown.
