SIA bid for Air India stake rejected

SIA bid for Air India stake rejected

NEW DELHI (Reuters): India has rejected a call from Singapore Airlines (SIA) that it be allowed to bid for a higher 49 percent stake in state-run Air India, newspaper reports said on Monday.

The Indian government is offering 40 percent of the loss- making international carrier under existing terms.

SIA, in partnership with leading Indian industrial group the Tatas, is the only bidder left and had recently sought a higher stake in Air India, the Economic Times daily said.

"The rules of the Air India disinvestment program cannot be changed midcourse and the Tata-SIA consortium has to settle for 40 percent equity which is on sale now, officials have informed representatives of the Singapore-based airline," the daily said.

"SIA has also been told that it is not possible for the government to give any assurance of offering additional equity stake after the current strategic sale is completed," the report quoted government officials as saying.

Disinvestment ministry officials said if the 40 percent equity stake limit was not acceptable to SIA it should have raised the issue before expressing its interest and not at this advanced stage of sale, the Asian Age newspaper reported.

SIA told Reuters last week it had not submitted its final offer for Air India, but had also not withdrawn from the race as reported in the media.

The sell-off is seen as a litmus test of the government's commitment to privatization of large state-run firms.

The only other contender for Air India, the billionaire Hinduja brothers, were last month disqualified from the race.

India has said it would go ahead with the sale even with a single bidder as long as the Tata-SIA offer met the government's reserve price.