New Delhi: Air India has begun the process for the disinvestment of its three businesses — Air India Ltd, Air India Express Ltd, and Air India SATS Airport Services Ltd (AISATS). While Air India Ltd is the public sector undertaking (PSU) that owns the national carrier, Air India Express Ltd is a subsidiary of the company that operates the low-cost airline Air India Express and AISATS is the arm that provides airport services in ground and cargo handling.
According to a tender published on the Air India website, the PSU is looking to engage a law firm to review and summarise “material contracts entered into by AI entities”, “all cases filed by or against the AI entities” and highlight liabilities, if any in these cases, along with “all labour-related issues.” The last date for the submission of bids by law firms is November 8.
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Disinvestment of Air India
The scope of work involves the group’s contracts valued over Rs 50 crore, including service level agreements, aircraft lease agreements, fuel agreements, airport lounge facilities agreement etc., along with licenses obtained or returns filed under labour legislation from 2016 onwards, employee benefits, employment-related agreements and labour law disputes.
Air India said that law firms applying for the tender should have handled at least five merger and acquisition deals, particularly for listed businesses in India or PSUs and that there should not have been engagement between the bidder and an airline or any other agency for acquisition of Air India or its assets to avoid conflict of interest — among key criteria stipulated by the carrier.
The airline’s total debt and liabilities stood at Rs 70,000 crores at the end of financial year 2018-19. It owes around Rs 5,000 crores to oil marketing companies for jet fuel supply. The government was forced to abort a plan for disinvestment of Air India, in May last year after it failed to attract bidders. It was then decided that the Centre will infuse more funds into the national carrier and cut down debt by raising resources by selling land assets and other subsidiaries.