Mumbai: Tata Group, India’s salt-to-software conglomerate, has reportedly submitted an expression of interest (EoI) for the debt-laden national airline Air India over the weekend. Earlier, several news reports mentioned that the Tata Group had started due diligence and likely to make its bid close to the December 14 official deadline.
It is worth noting that the Centre had in January sought bids for selling its entire 100 per cent equity in the cash-strapped carrier airline, including Air India’s 100 per cent stake in no-frill subsidiary Air India Express Ltd and 50 per cent stake in Air India SATS Airport Services Pvt Ltd.
The Tata Group is believed to have used its budget airline joint venture in India with Malaysia’s AirAsia Group, Air Asia India, to submit the EoI, according to a report in ToI. Several news reports said that Tata Sons was considering to slowly raise its stake in AirAsia India to more than 76 per cent by the end of 2020-21.
Further, a group of 200 Air India staff is likely to file EoI, and the group claims to have a financial investor onboard, the publication mentioned. Budget airline SpiceJet’s Chairman and Managing Director Ajay Singh also is eyeing the embattled national carrier but the domestic carrier was reticent to comment.
Back in 2018, there were no bidders for Air India when the Centre had first offered to sell a 76 per cent stake, this time around there are multiple interests. The ailing airline has outstanding debt of Rs 23,286 crore after the government brought it down from Rs 62,000 crore earlier this year to make the carrier more attractive to potential buyers.
Civil Aviation Minister Hardeep Singh Puri on Sunday said: “It (AI divestment) is a confidential procedure. The department concerned (DIPAM) will comment at the appropriate time.” Last year, the minister had mentioned the carrier would have to shut down if not privatised.
Tata Sons, the holding company of the $113 billion (about Rs 8.34 lakh crore) Mumbai-based conglomerate, is said to have shown its interest through AirAsia India, where it has a significant majority stake. Though Tata Sons operates a full-service carrier, Vistara, in partnership with Singapore Airlines, it has decided to submit EoI through AirAsia India. Singapore Airlines was reluctant in participating in the privatisation process of the beleaguered Air India, the daily mentioned.
More importantly, Singapore Airlines is in the midst of raising fund after it posted its biggest quarterly loss due to a huge drop travel demand because of the Covid-19 crisis.
The newspaper citing sources said since AirAsia India was created before Vistara, the former’s agreement allows it to enter the full-service business. According to industry watchers, the Tata Group—which founded AI as Tata Airlines in 1932—is being seen as the most likely winner.