According to reports, Tata Group is seeking to persuade its partner, Singapore Airlines, with whom it operates Vistara to waive off a non-compete clause in the agreement to bid for Air India and also partner the conglomerate in its bid
NEW DELHI: Salt-to-software conglomerate Tata Group is likely to submit an expression of interest (EoI) for national carrier Air India Limited before the deadline on Monday, said a person with direct knowledge of the matter.
“Tata Sons is likely to bid for Air India this time around,” the person said, requesting anonymity.
When contacted, a spokesperson for Tata Sons declined to comment.
Mint couldn’t immediately ascertain if any other potential bidders for the national carrier is likely to submit a bid before the deadline on Monday evening.
If Tata Sons ends up bidding for Air India, it will be the first time that the current government would have found a potential suitor for the national carrier after drawing a blank two years ago.
A spokesperson of ministry of civil aviation also didn’t offer comments.
According to news reports, Tata Group is seeking to persuade its partner, Singapore Airlines, with whom it operates a joint venture–Vistara–to waive off a non compete clause in the agreement to bid for Air India and also partner the conglomerate in its bid.
Qualified institutional bidders, if any, will be invited to start bidding for the airline from 28 December, according to the latest government corrigendum.
The government, this time around, plans to divest 100% of its equity share capital in Air India Limited, which includes Air India’s shareholding interest of 100% in AI Express Ltd and 50% in Air India SATS Airport Services Private Ltd.
The government had failed to attract any bid for the national carrier, after putting up 76% of airline’s stock two years ago. However, this time around, selling the airline may be a challenge amid the pandemic which has adversely affected the aviation sector.
“Air India is a legendary brand, which has some good assets that include slots, aircraft, and a sizeable international market share. The privatisation of the national carrier may however be difficult to execute during the current pandemic, which is bleeding out airline companies,” said a New Delhi-based senior airline official.
Indian airlines are set to report net losses of about ₹ 21,000 crore during fiscal 2021 following a raft of travel restrictions amid diminishing travel appetite due to rising covid infections, and would require additional funding worth ₹ 37,000 crore over FY2021-23 to recover from losses and debt, credit rating agency Icra Limited said in a recent report.
Icra added that the agency maintains a negative credit outlook on the Indian airline industry.