Bloomberg is reporting that the attempted sale of Air by the government has attracted no buyers.  As they point out this is a blow to the Prime Minister.

Since the deal required taking on 66% of the airline’s $7.8bn in to get 76% of the company, the lack of excitement is understandable.  Moreover, is not clear that the buyer could layoff the thousands of people on the payroll the does not need.

Last year we speculated the privatization might not occur.  Count us not surprised by the latest news.

Back in 2015, we took a rather negative view of the airline, asking if should simply be disbanded.

Indeed, a search on our site reveals several stories about the airline.  None of which are especially positive.

The Indian government now has to go back and rework its offering.  Any progress must, in our view, include unbundling assets.  For example, the government might consider taking the airline’s large real estate portfolio and hive that off separately.  Clearly, the buyer needs to have free reign in staffing levels.  And, of course, that has to be taken on by the government itself.  The debt is artificial because was created to support the staffing and votes.  The buyer probably won’t be running for office, so the votes don’t matter.

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