Tata Sons, the holding company of India's largest conglomerate, and SpiceJet chief Ajay Singh are among those who submitted financial bids to acquire loss-making state airline Air India. Tuhin Kanta Pandey, secretary of the department that is overseeing the privatisation process, tweeted of financial "bids" being received but did not say how many companies were in fray.
A Tata Sons spokesperson confirmed that the group has put in a bid for the national carrier. SpiceJet chairperson and managing director Ajay Singh has submitted a financial bid in his personal capacity, sources said. Another source said multiple financial bids have been received for the airline.
The financial bids will be evaluated against an undisclosed reserve price and the bid offering the highest price above that benchmark would be accepted. The bid will be initially examined by the transaction advisor before the recommendation is sent to the Cabinet for approval.
Wednesday was the last day for putting in the financial bid, the Department of Investment and Public Asset Management is taking the process to the next stage. The process now moves to concluding stage," the secretary, Department of Investment and Public Asset Management, said on Twitter.
The Centre has been trying to find a buyer for Air India and earlier the government was up for selling a 76% stake. Now, the Centre is selling 100% stake of Air India. The process started in January 2020 got derailed because of the pandemic and this time, the ministry was firm to not postpone the last date of bidding. Tata Group was among the multiple entities that had put in an initial expression of interest in December 2020 for buying Air India.
As of March 1, 2019, Air India's total debt was over pound 6 billion. The debt will be transferred to its new owner but the government made it easy for the new owner by inserting a flexibility clause. Going by the new clause, the new owner of Air India will have to absorb £2.33 billion while the rest would be transferred to Air India Assets Holding Ltd, a special purpose vehicle.