The Adani group, which has already won the bid to manage 6 airports, is now all set to join the race of acquiring the state-run airline – Air India. And for this, the conglomerate is planning to submit an expression of interest (EoI) by next month, disclosed a source close to the development.
However, the final decision depends on the outcome of the due diligence post submission of the EoI. Since, after the EoI process only prospective bidders will get access to airline data.
The Adani group is not the only one interested in this complex deal. The Tata group, the Hinduja group, Indigo and a New York-based fund, Interups, are also expected to submit their EoIs. The deadline of submitting the EoI is 17th March.
This is the second attempt made by the Centre to sell the airline after it failed to receive interest in the first round last year.
As a matter of fact, sale of Air India to a private player is important for the central government as it has had to pump in Rs 30,000 crore of tax payer’s money into the airline since 2012. The airline, however, has not made money since the merger of Air India and Indian Airlines in 2007.
Apart from Air India, the government has also offered to sell Air India Express and its 50 per cent stake in Air India SATS Airport Services.
Therefore, they have come up with changes like relaxation of various norms, including clearing of the balance sheet, transfering of remaining portion to the special purpose vehicles, introduction of minimum shareholding of an investor and much more to ensure success this time.
Despite this, things are not easy for the Adani group as, according to the bid criteria an airline or a group owning an airline cannot own more than 27 per cent in the six airports that are already with the Adani group.
A similar clause restricting airlines or group owning airlines from owning more than 10 per cent in Delhi airport recently resulted in collapse of the Tata-GIC group’s investment in GMR.
A banker, close to the sale process of Air India, said the present rules will not bar the Adani group from bidding for the airline. “We want as many companies to bid for the airline as it is a good asset after Rs 30,000 crore of debt was removed from the airline along with the government’s offer for 100 per cent stake,” said the source.
According to present aviation sector norms, foreign airlines can bid but can only acquire a maximum of 49 per cent stake due to sectoral caps on foireign direct investment.
Air India and its subsidiary, Air India Express had about 120 aircraft at FY18-end and 126 aircraft till September last year. Its fleet has both narrow-body aircraft from Airbus and wide-body planes from Boeing, making it simpler for …
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