Air India Sale: Loss Making Airline Gets Multiple Bids; Interups Inc., Tata, AI Employees Submit EOIs

Multiple expressions of interest have been received for strategic disinvestment of Air India, read a tweet from the Secretary, Department of Investment and Public Asset Management.

(Representative Image/ Getty)

New Delhi: US-based Interups Inc. on Monday submitted an Expression of Interest (EOI) in picking up stakes in Air India after employees of the airline have formed a consortium with the US-based company to bid for the airline. The last date for submission of EOI submission to buy Air India ends today i.e. December 14. Tata Sons, the Tata Group's holding company, has put in an expression of interest (EoI) to buy Air India, the airline it founded before it was nationalized in 1953, said a source in the know of the development without elaborating further. "Multiple expressions of interest have been received for strategic disinvestment of Air India. The transaction will now move to the second stage," according to a tweet from Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management read. The other EoI was submitted by a consortium consisting of 219 Air India employees and a US-based fund in the 51:49 ratio, with employees owning the majority stake. The rules allow bid by Air India employees, but the disinvestment guidelines mandate that they will not partner with any private company and partner with either a bank or a financial institution. Apart from the investors' backing, it is learned that each of the 219 employees will contribute Rs one lakh willing to participate in the bid. The last date for submission of physical bids is December 29. Laxmi Prasad, chairman of Interps Inc., had officially confirmed the development. In order to form a consortium, employees from multiple departments join hands. Earlier in September there were reports of Interups Inc emerging as a serious contender for acquiring India's national carrier. This is in line with the criteria of the airline which allows bid by its employees. However, disinvestment guidelines mandate that the company will not be able to partner any private company. It has to partner with either a bank or a financial institution. The US fund looks over 27,000 retirement accounts of NRIs in the US. What's on offer? The government on December 10 said it will intimate qualified interested bidders (QIBs) of Air India on January 5 next year, instead of the earlier decided date of December 29, 2020. Even as there is no extension of the the deadline for EoIs (Expressions of Interest) for the national carrier, the interested entities are required to submit the physical bids within 15 days from December 14 — the last date for submitting EoIs. As per the Air India EoI floated by DIPAM in January, of the airline's total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle. This is the sixth attempt to sell Air India. In 2018, the government wanted to sell 76% of the shares but no buyer was found. The government has tried to make the sale attractive for the bidder of the beleaguered airline. Now, the government has offered its 100 percent stake in AI and AI Express for sale instead of 76% in the first attempt and the entire 50 percent in ground handling joint venture AI-SATS. (With additional inputs from Piyush Pandey)