NEW DELHI: The government on Thursday said it will encourage Private Equity (PE) and Venture Capital (VC) funds with adequate enterprise, or managerial or technical investors in a consortium model to participate in strategic divestments.“We are not looking only for an airline to take over Air India,” Neeraj Gupta, secretary, Department of Investment and Public Asset Management (DIPAM) said, adding that DIPAM will decide how domestic airlines will be treated in terms of eligibility in a consortium but otherwise anybody who has net worth and funds can bid for Air India. He was speaking at the annual function of business chamber ASSOCHAM.
The move is important as not many airlines had expressed interest in buying Air India.“In all these disinvestment exercises also, we have kept them technically neutral, finance is the main criteria and your capability to take over and run such an asset in financial terms is the main criteria,” Gupta said, adding that the government had received a lot of queries from both airlines and non-airlines for the proposed divestment of Air India.
According to him, the expression of interest documents do not explicitly prohibit venture funds and there should be no impression that they cannot participate. “Venture funds can always tie up with technical partners to bid. All they require is to meet the net worth criteria,” he said. As per the bid document, bidders would be required to have a minimum net worth of Rs 5,000 crore and should have posted profit after tax in three of the previous five financial years from the Expression of Interest deadline.
The last date for submission of the bids is May 14.Talking about the huge potential for growth in the PE and VC sector, the DIPAM Secretary pointed out that from 2009 to 2016, the PEs and VCs have grown in both size and volume of the deals.