Civil Aviation Minister Hardeep Singh Puri on Thursday said that the bidding for national carrier Air India would be done on its enterprise value instead of equity value, reported PTI. The enterprise value of a firm includes the equity value, the debt owed, along with the cash available with the company. Equity value takes into consideration the worth of a company’s shares.

“The bid will be on the enterprise value,” said Aviation Secretary Pradeep Singh Kharola at a press conference. “In this enterprise value, a ration has been earmarked between how much he [bidder] can take as debt and how much he has to give as cash.”

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Kharola explained that 15% of the enterprise value that the bidder may quote was to be given in cash to the Centre and the rest of the 85% should be taken as debt along with the airline. As of March 31, 2019, Air India’s debt was Rs 58,255 crore. Later in the same year, Rs 29,464 crore debt was transferred from Air India to a Centre-owned special purpose vehicle named Air India Assets Holding Company Limited or AIAHL.

“In the current PIM [Preliminary Information Memorandum], the debt left in the company would be Rs 23,286 crore,” Puri said, according to Hindustan Times. The central government also extended the deadline for the bids till December 14.

In August, the Centre had extended the deadline for placing bids for the carrier by two more months, citing the economic fallout of the pandemic. The date for intimation to qualified interested bidders has also been extended by over two months till November 20.

On January 27, the Narendra Modi government had announced that it wanted to sell its entire stake in Air India. This was a major shift from the government’s stance in 2018 when it wanted to divest only 76% stake in the national carrier. The proposed stake sale, however, had failed to take off then. This change will give complete operational freedom to the new owner.