Oh so it's now an asset sale is it? A few pages back, posters in favor of the current plan of privatization were saying AI has no assets worth buying, but now it's an asset sale?
Nobody in their right mind thinks that AI has not assets worth selling. It AI's equity that has completely eroded to be of no value. While this is not exactly a pure asset sale - that happens when the company is wound down or close to being shut, like KF, much of the price that an acquirer will pay here can be attributed to the value of the assets
Some consistency from the pro-privatization people would be appreciated. If, after writing off the debt in question, AI remains a viable concern such that it would be of interest to other airline buyers, then why is there the need to sell it to what is in effect its rivals in the first place? Why not just spin-it off into a separate, autonomous company with professional management, forgive the aircraft debt as well, and let it go its own merry way, without disrupting its network structure, alliance affiliation, codeshares, or anything like that?
The debt is not being forgiven completely. Part of the debt, let us call it tranche A, will be assumed by the acquirer. The remaining debt, tranche B, will be moved to an SPV. The acquisition price will be used to pay down part of the debt in tranche B. What ever remains will be a haircut for the banks or paid by the government (the shareholder). This is how acquisitions of highly leveraged and unprofitable companies take place the world over. How much of the debt is taken over by the government ultimately depends on the valuation that AI fetches.
The primary aim of privatisation is for the government to get out of businesses, especially money bleeding unprofitable ones like AI. It doesn't make sense to forgive its debt and let it continue in its current form. It will only be a matter of time before we taxpayers are required to bail it out again.
Oh, and perhaps keep it in one piece as well, rather than disintegrating it into 4?
Value unlocking. When a large organisation with multiple business segments is being sold, it is common to split it into parts so that the valuation of the better performing/profitable parts are not bogged down by the unprofitable ones. In AI's case Turkish ground handling company Celebi has expressed interest in acquiring AI's ground handling division, AITSL, for example.