Ernst & Young India has been appointed as transaction advisor by the government for advising and managing the proposed strategic disinvestment of debt-ridden Air India. The strategic disinvestment of Air India is proposed by transferring management control and sale of 76% equity share capital, which is held by government of India. Also Read - Air India Halts All Bookings Till April 30, But What About Employees' Pay?

As part of its disinvestment strategy the government has decided to retain a 24 per cent stake in Air India and Air India Express. The divestment will be done through open competitive bidding process and in order to participate the bidders will have to meet the networth criteria of Rs5,000 crore. The net worth has to be calculated on the basis of an existing formula under the Companies Act Also Read - Lockdown: Air India to Operate 18 Flights For Citizens of Germany, Canada, France, Ireland Stranded in India

The divestment of Air India has attracted many buyers even before the process has started. Recently, Doha-based Qatar Airways and India’s low cost carrier IndiGo were reported to be in talks to make a joint bid for Air India. For IndiGo the deal would mean a higher market share in domestic flights as two airlines together account for more than a 50% share. On the other hand Qatar is going through a crisis as several Arab countries have severed ties with it for allegedly supporting terrorism. This is not the first time, IndiGo has shown interest in the state-run airline. In the past the company submitted an unsolicited expression of interest (EoI) in Air India soon after the disinvestment announcement was made . Also Read - COVID-19: DGCA Suspends Breathalyser Tests For Aviation Staff Members

The Centre for Asia Pacific Aviation (CAPA) earlier said that Jet Airways, IndiGo, SpiceJet and Vistara could be interested to pick a stake in Air India. It has also been reported that the Air France-KLM together have been interested to tie-up with Jet Airways and form a consortium for bidding. Currently, Air India has debt burden of around Rs 50,000 crore while its market share is just around 14 per cent.