Air India privatisation: Employee consortium, Pawan Ruia out of race

Tata Sons now only firm in the fray for distressed national carrier

The Air India (AI) employees’ consortium and Kolkata-based businessman Pawan Ruia have not qualified for the second round of the sale process for the national carrier. This leaves Tata Sons as the only entity that has confirmed its participation in the bidding process.

 

While media reports said SpiceJet promoter Ajay Singh is also in the reckoning, Business Standard couldn’t verify this claim. Singh didn’t respond to multiple calls and messages.

 

In a three-page letter to employees, Meenakshi Mallik, commercial director of AI, said she had seen an email from the transaction advisor EY to the government, informing the employees that they have been unsuccessful in qualifying for the next phase of the ‘Disinvestment Acquisition’ process.

 

Sources close to Ruia confirmed that his consortium too received a similar letter from EY. Ruia, who had acquired distressed companies like Jessop and Falcon Tyres, had submitted a bid through a consortium of group companies.

 

The EY letter lists three reasons for disqualifying the employees’ Expression of Interest: Non-submission of three years’ audited financial statements for the foreign consortium member; non-submission of information or details by interested bidders for investments in offshore companies, which forms a substantial part of the net worth of the foreign consortium member; and, the foreign consortium member not being an appropriately regulated investment fund as defined in the Preliminary Information Memorandum.

 

“It was certainly upsetting to read this, but what I found reassuring in the email is that the government had no objection or reservation whatsoever with any of the documentation furnished on behalf of the employees. This can only mean that the employees’ documentation was, in fact, perfect, which is a clear reflection of not just our sincerity in the process, but also of our competence to have participated and, if selected, to run our airline,” Mallik’s letter says.

 

“While it is flattering to note that many wanted to associate themselves with us, we were, in fact, partnered with a financial fund based out of the Republic of Seychelles and dealt exclusively with it through the disinvestment process,” the letter adds.