Air India Will Be Sold To Either Tata Group Or SpiceJet; No Other Company Shortlisted!
Tata group and Spicejet had expressed interest in buying out Air India and the two have now been shortlisted for the same.
Chances are high that Air India will return to its founder, the Tatas.
The Next Steps
The next step is the process of due diligence after which the two entities will have to submit financial bids.
Through the bids they will have to make clear the amount of debt of the carrier they are willing to take on and the amount of upfront payment they can make.
The winner will be chosen based on the group which quotes the highest economic value for Air India.
Air Asia India will be representing Tata group whereas Spicejet promoter Ajay Singh is looking to bring in a Middle Eastern sovereign fund for the acquisition.
Ajay Singh is also famous for coining the popular phrase “Ab ki baar Modi sarkaar” during the 2014 Indian general elections.
Tata group is also looking to rope in Singapore Airlines with whom it runs the carrier Vistara in India.
However Singapore Airlines has not overtly expressed any interest in Air India given the blow dealt by the pandemic to its balance sheet.
Tata group is the industry’s favorite to win the bid.
Tata group, now India’s largest conglomerate, had actually participated in the founding of Air India in 1932.
However they then sold its stakes 2 decades later to the Indian govt in 1953.
Now Tata wants to flex its muscles in the aviation sector in which it already has a foot in the door with Vistara.
Acquiring Air India will further Tata’s ambitions of becoming a top player in Indian aviation.
The whole process is expected to wrap up by the 2nd quarter of the next fiscal year.
In the initial period the govt will guide the winner through the transition phase where many hurdles await in the form of union pressures and trouble from other stakeholders.