Tata Sons is ready to enter the Air India cabin after the 1953 departure. (File photo) | Photo credit: BCCL
New Delhi: Tata Group, India’s salt-to-software conglomerate, reportedly filed an Expression of Interest (EoI) for debt-laden national carrier Air India over the weekend. Earlier, various news reports mentioned that the Tata Group had initiated due diligence and would likely make its offer close to the official December 14 deadline.
It is worth noting that the Center had requested offers in January to sell its entire 100 percent equity capital in the cash-strapped airline, including Air India’s 100 percent stake in the no-frills subsidiary Air India Express. Ltd and the 50 percent stake in Air India SATS Airport Services Pvt Ltd.
The Tata Group is believed to have used its Indian low-cost airline joint venture with Malaysia’s AirAsia Group, Air Asia India, to introduce the EoI, according to a report in ToI. Various news reports said that Tata Sons was considering slowly increasing its stake in AirAsia India to more than 76 percent by the end of 2020-21.
Additionally, a group of 200 Air India employees is likely to file an EoI and the group claims to have a financial investor on board, the post mentions. The president and CEO of budget airline SpiceJet, Ajay Singh, is also looking at the national airline in conflict, but the national airline was reluctant to comment.
In 2018, there were no bidders for Air India when the Center first offered to sell a 76 percent stake, this time there are multiple interests. The troubled airline has an outstanding debt of 23,286 million rupees after the government reduced it from 62 billion rupees earlier this year to make the airline more attractive to potential buyers.
Civil Aviation Minister Hardeep Singh Puri said on Sunday: “(AI’s divestment) is a confidential procedure. The department in question (DIPAM) will comment at the right time. “Last year, the minister had mentioned that the airline would have to close if it was not privatized.
Tata Sons, the Mumbai conglomerate’s holding company of $ 113 billion (roughly Rs 8.34 lakh crore), has been said to have shown interest through AirAsia India, where it has a significant majority stake. Although Tata Sons operates a full-service airline, Vistara, in partnership with Singapore Airlines, has decided to ship EoI via AirAsia India. Singapore Airlines was reluctant to participate in the privatization process of the embattled Air India, the newspaper said.
More importantly, Singapore Airlines is in the midst of fundraising after it posted its biggest quarterly loss due to a large drop in travel demand due to the Covid-19 crisis.
The source-citing newspaper said that since AirAsia India was created before Vistara, the former’s deal allows it to enter the full-service business. According to industry observers, the Tata Group, which founded AI as Tata Airlines in 1932, is being viewed as the most likely winner.
