India is set to absolve Air India bidders from any liabilities arising out of the Cairn Energy lawsuit. The lawsuit has claimed the state-run airline’s asset as compensation over a long-running tax dispute with the Indian government.
The government will offer an indemnity to financial bidders of the airline. The Centre has been attempting to sell the airline but has not been successful. In the latest attempt, officials cleared a sale purchase agreement on Saturday. The agreement is likely to be approved by the group of ministers this week, as mentioned in a report in Bloomberg.
Meanwhile, the government expects to receive financial bids by September 15, as mentioned by junior Civil Aviation Minister VK Singh in the parliament. Air India has a total debt of $8.2 billion.
Tata Group that has been touted as a potential bidder for the airline.
Calling Air India an ‘alter ego’ of the country in a US court, Cairn has held it responsible for the government’s liabilities, including arbitration awards. Cairn won an arbitration award for $1.2 billion plus interest over a retrospective tax demand from the government. Devas Multimedia is also seeking $1.2 billion it won in international arbitration from India over a dispute and is looking to seize Air India’s assets.
India last month scrapped the retrospective tax that was introduced in March 2012. The amendment is aimed at scrapping demands for past payments from companies. The government also agreed to settle ongoing disputes and pay refunds to companies that were penalised under the law.
Also read: Air India asks US court to dismiss Cairn plea, says it is premature Also read: Govt targets Air India handover by Dec