A group of Air India’s staff plans to bid for equity shares of the country’s flag carrier. To reach the goal, each of Air India’s employees involved in the bidding will need to contribute up to Rs 1 lakh (approximately $1,400).
Some of Air India’s employees plan to bid for the acquisition of 51% of the airline’s stake, reported local media on December 3, 2020. If the plan succeeds, the employees will step into a joint venture with the other investor, owning the remaining 49% of Air India’s stake. An internal note mulling a bid seen by the local media affirmed that the staff of the company would try to rope in a financial partner for the new joint venture despite the collective airline’s debt liabilities reaching up to Rs 90,000 crore ($12 billion).
“Financially, I know that we do not have the necessary wherewithal to participate in this bid process alone,” who reportedly stated in the note. “We have accordingly sought a private equity fund that will invest in the company. Employees will own and control 51% and the financial partner [will hold] the 49%.”
“Until we cross the expression of interest stage, no money is needed to be collected from employees. After successfully completing stage one, we are planning our bid in such a way that no single employee will have to contribute more than Rs 1 lakh [$1,400],” the note said.
Following a previous Tata Sons announcement, released on November 27, 2020, the group is seen as the most likely bidder for the embattled airline. Tata Sons have already stepped into negotiations with Singapore Airlines (SIA1) (SINGY) (SIA), through its joint venture Vistara, offering the airline to rule out a non-compete clause and join the company in a proposed bid for Air India. If both parties did not reach an agreement, Tata Sons would bid solo to control a part in Air India’s stake.
According to the most recent governmental update, the deadline for submitting bids for Air India was rescheduled to December 14, 2020. The government of India initiated the sale of 100% of Air India’s equity share capital back in January 2020, setting an initial deadline in March 2020. However, the deadline for bidding was extended once due to the COVID-19 pandemic. The government of the country hinted that if the situation with the sickness rate worsened, the deadline could be extended repeatedly.