Sunday, October 29, 2017

Air India disinvestment gets flight ready

he process of disinvestment of the debt-ridden national carrier, Air India, has started, and is no longer confined to the files. Several discussions have been held with different stakeholders on the sale of the carrier’s property and those of its five subsidiaries. To expedite the process, a bid was held on Friday to finalise the transaction. Ernst & Young (EY), a consultancy group, and investment bankers Rothschild India Pvt Ltd, have been chosen as transaction advisors to assist in the process of disinvestment. Legal firm Cyril Amarchand Mangaldas and Luthra and Luthra have made it to the final rounds in the technical bids to assist Air India as legal advisors. Sources in the Ministry of Civil Aviation confirmed the developments to The Sunday Guardian.

A source in the ministry, aware of the latest developments told The Sunday Guardian, “The process of disinvestment of Air India has begun and we have been meeting different stakeholders to formalise the process of selling the national carrier. It is not possible for any one company to buy the entire Air India empire and, therefore, proposals for its five different subsidiaries are being received separately, and they will also go under the hammer separately, once the process of bidding begins.”

At least three entities, the Tata Group, the Bird Group, an aviation services provider, and InterGlobe Aviation, which operates the budget carrier IndiGo, have shown interest in buying stakes in the beleaguered state-run behemoth, which has seen its business shrink over the years due to decades of inefficiency and mismanagement.

Rajiv Nayan Choubey, Secretary, Ministry of Civil Aviation, had confirmed to The Sunday Guardian in August this year about the interest that IndiGo and the Bird Group had shown in Air India and its subsidiaries, but had not provided much detail at the time.

However, according to sources, IndiGo has expressed its interest in buying Air India’s international operations and its low-cost domestic operations. The Ministry of Civil Aviation has confirmed reports of IndiGo showing its interest in such operations, and the low cost carrier has also formally written to the ministry to place its bid once Air India is up for sale.

The Bird Group, on the other hand, is keen to acquire the Air India Air Transport Services Limited (AIATSL), one of Air India’s subsidiary companies, which primarily deals with transport and ground handling services at all airports.

According to sources in the ministry, recently, the Bird Group has sent a formal proposal to them, expressing its intention to bid for AIATSL. The Bird Group has been in the business of ground handling for a long time. Sources add that the Bird Group is also interested in acquiring stakes in Air India subsidiaries that deal with hotel and hospitality businesses, and will bid for the same once the bidding process is open.
29/10/17 Dibyendu Mondal/Sunday Guardian Live

0 Comments: