Interups says it has Rs 13,500 cr ready for Air India, can invest billions

US based firm has $28 mn market cap, has already bid for several bankrupt firms in India such as Lavasa Corp, Asian Colour Coated Steel and Reliance Naval

US-based fund Interups says it has Rs 13,500 crore as available capital for investment in Air India and is ready to invest "billions of dollars" in the Indian aviation sector. 

The US OTC-listed firm has a market capitalisaton of only $28 million and has already bid for several bankrupt companies in India including Lavasa Corporation, Asian Colour Coated Steel and Reliance Naval. It has not won a single company yet and lenders say they want to see how Interups will arrange for funds for its acquisitions in India before taking any call on its bids.

For the Air India bid, Interups has joined hands with a few employees of the airline. It plans to raise funds by splitting some of its infrastructure related assets into an aviation InvIT which would have underlying assets like air routes, ground handling, repairs, and training etc. 

The company holds more than 27,000 retirement asset customers with over $1.8 billion under its tax advisory and is the sole adviser on these accounts.

Interups Chairman Laxmi Prasad says they bid for Air India in "national and government" interest, which will also protect employees' interest. 

On the Tata bid, Prasad said they don’t see any contender as a bet to the valuations they are planning to offer for Air India. “If someone is bettering our offer and it helps the government then I will gladly welcome it,” he said.

 

The company has formed a consortium with employees of Air India with the employees planning to hold 51 per cent stake and Interups will hold the rest after the Government sells its stake.

The firm had even made a $50 million offer to acquire Air Asia Berhad’s 49 per cent stake in Air Asia India but did not get the clearance from Tata Sons which holds Right of First Refusal on AAB’s stake.   Now Interups is taking on Tata Sons for the acquisition of Air India which would require a lot of political lobbying apart from having deep pockets. 

“It’s like a David-versus-Goliath fight in which Tata Sons will win hands down – taking into account its financial strength and legacy. Interups will require a lot of financial power to take the Tatas head on,” said a senior banker. 

As the Air India sale will also have political repercussions, the government will think twice before handing over the company to any bidder, he said.

Interups has taken some well established companies head on. In June this year, it made a bid for Asian Colour Coated Steel Ltd after JSW Steel was selected as the highest bidder last year. As JSW deal was pending for over a year, Interups higher offer than JSW woke up both lenders and JSW group which took over the company by paying the lenders.

In the case of Lavasa, Interups has tied up with Pune based builder, Anirudha Deshpande to take over the hill city which has now turned into a ghost town. 

Interups Inc:

* Has bid for Reliance Naval, Asian Colour Coated, Lavasa in the past

* Is listed on US OTC with $28 mn market cap

* Wants to bid for Air India in national interest

* Has Rs 13,500 crore of capital available to meet AI bidding creteria