Air-India Maharajah Receives Multiple Bids. The Question is Whom Will He Serve?

The Government of India confirms that there are multiple bids and bidding stands closed.

TR earlier reported about the possible sale of the Government-owned national carrier Air-India.

Only two suitors are bidding for the Airline even though the GoI has said that it has received ‘multiple bids’,

Tata Sons have directly submitted their bid.

Another bid is from a consortium of the airline’s employees and the US-based investment firm Interups Inc.

A320neo Air India takeoff 1 - Travel Radar - Aviation News
Air India A320neo takes off © Airbus / P. Pigeyre

The Intended Sales Goes to the Second Stage.

The previous attempt to sell in 2018 was a disaster with none expressing interest to buy the debt-laden & ailing Airline.

Two bids have been received before the deadline of 5 p.m. on 14th December 2020.

“Multiple expressions of interest have been received for strategic disinvestment of Air India. The transaction will now move to the second stage,”

Secretary, Department of Investment and Public Asset Management, Tuhin Kanta Pandey, said

Again, in its previous attempt to sell the Airline,  76% of the stake was offered for off-loading.

While this time,  the Government has offered to off-load its entire stake in Air India and Air India express.

50 per cent of the stake it holds with the Ground handling agency Air India – SATS airport services.

The decision of qualified interested bidders is likely to be announced as early as January 5 next year.  But before that,  entities who have shown their EOI will need to submit their formal bids latest by December 29, 2020.

Air India’s Financial Status Explained

Air India had current liabilities and provisions, including short-term loans and trade payables of Rs 70,686.6 crore and a net debt of Rs 58,255 crore at the end of 2018-19.  Thereafter, the government has transferred Rs 29,464 crore of this debt from Air India to a government-owned special purpose vehicle, Air India Assets Holding Company Ltd.

TR hopes the finalization of the bidder will happen in the first week of January 2021 based on the highest bid.

Enterprise Value (EV) will be the basis on which the firms will place their bids.  The selected bidder has to deposit 15 per cent equivalent of their bids in cash while the rest can be treated as debt.

Let us wait & see as to who will own the ‘Maharajah”.  Your comments are welcome!

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Radhakrishnan Pattabiraman
Radhakrishnan Pattabiraman
Aviation enthusiast, Japanese language enthusiast, currently, Personal Assistant to the Legislator of the state of Tamil Nadu, India. Has rich & successful experience in the Information Technology Industry


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