InvestorQ : Will the Air India bidders get affected by the Cairn UK case?
rhea Babu made post

Will the Air India bidders get affected by the Cairn UK case?

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Riya Dwivedi answered.
3 months ago
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In fact, it is the other way round. The Indian government is likely to include a clause in the disinvestment contract wherein the bidders will be absolved from any liability arising out of the lawsuit filed by Cairn Energy UK. In fact, Cairn had claimed state run assets of Air India as a proxy for the liability of the Government of India to recovery $1.2 billion from the Indian government. Air India, with its global assets, was an apparent target.

To give comfort to the bidders, the government has promised indemnity from any such tax related liability to the bidders. That would boost the chances of Air India finding a potential buyer. However, the government has already scrapped the retrospective tax subject to the other parties agreeing to no legal proceedings. If that is agreed, Cairn will not be an issue. The strategic sale of Air India is key to the success of the Rs.175,000 divestment target.

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