Tata Group and a consortium of 209 Air India employees are among bidders who have submitted bids for Air India, said sources
Bidders will now have to submit physical copies of the EoI within 15 days and the list of bidders who have qualified as per eligibility norms will be announced on January 5
New Delhi: On Monday, as the deadline for submission of Expression of Interest (EoI) closed for Air India disinvestment process, the Secretary of the Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey said that the Centre has received multiple EoIs. “Multiple expressions of interest have been received for strategic disinvestment of Air India. The Transaction will now move to the second stage,” said Pandey. Bidders will now have to submit physical copies of the EoI within 15 days and the list of bidders who have qualified as per eligibility norms will be announced on January 5.
Tata, Air India employee group submit bids
According to sources who spoke to PSU Watch, the biggest name to have thrown its hat in the ring is India’s largest conglomerate, Tata Group. They added that the group has submitted an EoI through AirAsia, where Tata owns a majority stake. In addition, they added that a group of 209 employees of Air India have also submitted an EoI.
According to a report published by Business Standard, the group of 209 employees and the bidding process is being headed by Air India’s current Director (Commercial) Meenakshi Mallik. “We have submitted an EoI along with a partner who will give us financial backing,” Mallik was quoted as saying by the newspaper. This was not independently verified by PSU Watch. The preliminary information memorandum (PIM) allows Air India employees to submit bids, however, DIPAM guidelines mandate the PSU employees to partner with either a bank or a financial institution and not a private company.
According to a communication sent to Air India employees by Mallik earlier, each employee in the consortium will have to make a contribution of Rs 1 lakh to place a bid for the national carrier. While the employees’ consortium plans to hold 51 percent stake in the airline, the remaining 49 percent is supposed to be held by the financial partner.
In order to woo investors, the government has introduced a new bidding structure for bidders. Interested bidders now need to bid Enterprise Value (EV) of Air India, wherein EV will be aggregation of debt and equity of Air India as assessed by the bidder in its financial bid. On the date of closing, debt which is lower of either the outstanding debt of AI and AIXL combined or 85 percent (or lower) of the EV, will remain as debt.
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