Tata Sons has emerged as a front runner to take over 100 per cent stake in the stressed national carrier Air India, sources involved in the sale process said on Monday after the expression of interest (EoI) deadline ended. There were other suitors as well including a consortium of Air India employees and US-based fund Interups.
Along with 100 per cent stake in the airline, the government is also selling its low-cost subsidiary Air Indian Express.
Click here to follow our WhatsApp channel
“Multiple expressions of interest have been received for strategic disinvestment of Air India. The Transaction will now move to the second stage,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said, adding that he’s satisfied that the sale process has moved to the next stage.
In 2018, the government had failed to garner a single EoI, following which it had to shelve the process. The disinvestment of Air India is crucial for the government to manage its finances as the debt-laden carrier will require over Rs 500 crore per month, according to government estimates.
Pandey, however, did not reveal either the identity of the bidders or the number of bids received for buying the national carrier.
A group of 209 employees of Air India has submitted an expression of interest in partnership with Interups Inc. From the employees’ side, the bid process is being led by Meenakshi Mallik, who is the current commercial director at Air India.
Sources, however, said that Singapore Airlines (SIA), with which Tata Sons operates full service airline Vistara, would not be part of the bid in the initial stages. However, Tata Sons management will not like to have a third airline venture and wants to merge Air India and SIA in future. Besides Vistara, Tata Sons owns 51 per cent stake in low cost airline AirAsia India.
Tata Sons didn’t respond to queries and a spokesperson of SIA refused to comment on the airline’s future investment opportunities.
The bid, jointly made by Interups Inc and Air India's employee group, proposes 51 per cent stake to the Air India Employee Association, which includes about 219 employees, including board members, as part of the consortium. The remaining 49 per cent will be with Interups Inc, Laxmi Prasad, chairman of Interups Inc, told Business Standard.
“We hold 27,000+ Retirement Asset Customers with over $1.8 billion under our tax advisory and the undersigned firm is the sole adviser on accounts. A section of these retirement asset customers have requested us to form a consortium with employees of Air India Limited,’’ Prasad said.