- Air Vistara is among one of the potential buyers during the second attempt of sale of Air India and the government is ready to sell a 100% stake in the carrier.
While Union Cabinet relaxes requirements for NRIs (non-resident Indians) to purchase 100 percent stake in the national carrier, sources in the Ministry of Aviation confirm that two potential buyers have purchased access to the virtual data room that provides additional details on Air India, Air India Express and AISATS — the three entities on sale.
Potential Air India buyers can buy a virtual data room that also has a draft share purchase agreement (SPA) on payment of (non-refundable) Rs 1 crore fees. Two bidders have purchased access to this facility so far, underlining their keen interest in acquiring Air India along with its subsidiaries.
The virtual data room covers broader information of Air India and its subsidiaries that are not part of the government’s floating EoI (expression of interest) document in January.
“Interested bidders also have the option before submitting the EoI to access the virtual data room which contains additional information about companies as well as the draft share purchase agreement,” the sale document says.
The government issued a preliminary information memorandum (PIM) on January 27, inviting the EoI from prospective buyers of Air India and its two subsidiaries.
One of the prospective buyers is Air Vistara. The statement made on Monday by Vistara Chairman Bhaskar Bhat that Vistara is considering bidding for Air India could be the best thing that could happen to the State-owned airline.
JRD Tata started Air India, and for a number of reasons, if Vistara were to bid and emerge the winner, that would be beneficial.
Vistara is a joint venture between Singapore Airlines and Tata Sons. So Vistara will see Air India return to Tata Sons when she wins the contract. It’ll also be the culmination for Singapore Airlines of its failed attempts to acquire Air India. Singapore Airlines had previously linked up with the Tatas in order to buy Air India when the Vajpayee government decided to divest the airline.
This is the Government’s second attempt over the past two years to sell Air India. Since it struggled to attract bidders in 2018, the government has this time sweetened the deal. The government, for example, is open to selling 100% stake and giving full management power to the new owner, which wasn’t the case last time when it decided to divest a 74% interest.
While Air India posted operating profits from Rs 177.2 crore during the period April-November 2019, due to the novel coronavirus outbreak it was one of the worst affected airlines in India. That’s because a majority of the airline’s revenue comes from international operations that have been dramatically curtailed as nearly 84 countries are battling the spread of coronavirus.