Thursday, December 17, 2020

Will employees take over Air India in 2nd disinvestment bid?

New Delhi: The last date to bid for cash-strapped national airline Air India has ended with the Expression of Interest (EoI) deadline ending on Monday. The government has said it has received multiple EoIs for strategic disinvestment of the Air India.

Going by the previous attempt by the government to disinvest its shares in the struggling PSU, the Air India Limited, the current bids are a positive sign to say that Air India finally has a buyer. Among the prospective buyers is a consortium of Air India employees and foreign fund.

Air India employees have reportedly submitted a bid in partnership with US-based Interups, an investment fund of the NRIs. Its chairman Laxmi Prasad has been quoted in media reports as making the offer of 51 per cent stake to Air India employees while retaining the other 49 per cent.

The argument of Interups fund is that Air India employees know the airline inside out and are the in the best position to fix what ails the national air carrier. Interups has a reputation of turning companies around.

The employees' group is aiming to raise a contributory fund made up of a minimum contribution of Rs 1 lakh from each Air India employee. Interups, however, has offered to invest all the money required to revive Air India.

There are also reports that Interups is eyeing to buy the AirAsia India after its Malaysian shareholder ran into financial troubles. There is a possibility that if Interups ends with acquiring both the Air India and AirAsia India, the two airlines may be merged into a single Air India unit.

The other major bidder is the Tata Group. Incidentally, Air India was originally started by the Tata Group in pre-Independent India in 1932 as Tata Airlines. The first flight service was inaugurated by the Tata Group founder JRD Tata piloted the first flight from Karachi to Mumbai. It was a cargo flight.

The Tata Group runs another airline, the Air Vistara in partnership with the Singapore Airlines. The Tata Group hold 51 per cent stake in the Air Vistara.

The government has said the transaction will now move to the second stage - that the bids will now be physically submitted by December 29 and evaluated to take a final call, expected by early January.

16/12/20 Prabhash K Dutta/India Today

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