Air India bidding process: All you need to know

NEW DELHI: The deadline for submission of expression of interest (EoI) for the beleaguered national carrier Air India ends at 5 pm on Monday. In October, the Centre in an aggressive push to off-load its stake in the national carrier decided to invite bids for AI, based on the company's enterprise value.


Here are the potential bidders who desire to get their hands on the airline:

Tata Group


India's largest conglomerate, Tata Group, is learnt to have submitted an EoI for AI. It is learnt that the vehicle used to file the interest in AI is AirAsia India, where Tata Sons has a significant majority stake.

(JRD Tata, the patriarch of the Tata Group, founded the airline in 1932.)

The group is apparently the strongest contender in race to acquire the 'Maharaja'.

SpiceJet

SpiceJet promoter Ajay Singh may submit EoI for Air India.

(SpiceJet's Ajay Singh)

Air India employees group

209 Air India employees led by airline director (commercial) and board member Meenakshi Mallik also submitted the EoI. They have a Seychelles-based fund to act as their financial investor.

(Meenakshi Mallik)

Interups Inc

New York-based Interups Inc chairman Laxmi Prasad too plans to take part in the bidding process. Prasad said: "Post acquisition, AI and our group shall sponsor aviation infrastructure investment trust ... We are actively advocating air line routes, ground handling, training and other facilities into infrastructure placement. This leaves the current company to remain lean and operational. We are proposing Air India limited to continue as is with employees to own 51% and interups NRI group to own 49%, capital completely invested by the NRIs. Willing and continuing employees will be offered 51% in the consortium that acquires the airline. No capital investment is required. We hold 27635 qualified retirement asset accounts owned by US based NRIs."

(Interups Inc chairman Laxmi Prasad)

Once the EoI process ends, first qualified bidders will be selected on basis of meeting eligibility norms.

Sale terms for eligible bidders

* They will bid on enterprise value (EV) basis. This means instead of being required to take on a pre-fixed level of Rs 23,000 crore debt of the airline, they will now quote an EV based on their estimate of the combined value of AI’s equity and debt.

* Winning bidders will be decided on who quotes the highest EV value and at least 15% of this value will need to be paid in cash while the rest can be taken on as debt.

What's next

* Interested entities need to submit physical bids within 15 days from December 14.

* Bidders who qualify to bid for AI as per eligibility norms to be intimated on January 5, 2021.