American bidder Interups to submit physical bid for Air India
Air India privatization plan is about to enter its final lap. On the last day for the submissions, the U.S-based fund Interups (ITUP), one of three bidders, is set to submit the physical bid in the Indian flag carrier sale.
ITUP fund is one of three bidders for the airline, alongside Indian conglomerate Tata Sons and a group of 219 Air India’s employees.
Laxmi Prasad, the founder of ITUP, confirmed to local media that the fund proposed a consortium with Air India’s employees, under which the employees would purchase the controlling stake (51%) in the Indian airline. Meanwhile, the fund expects to hold the remaining 49% of the airline’s stake. Prasad outlined that the fund was “in active discussions” and had “extended the offer very openly”.
As per bidding conditions, the employees are not able to cooperate with any private company but are allowed to set a partnership with a bank or any other financial institution.
However, Air India’s employees might not accept the open offer made by ITUP as the staff, led by Commercial Director of Air India Meenakshi Malik, has already submitted all the needed documents regarding its separate consortium and has reportedly found an undisclosed financial investor.
Another bidder, Tata Sons, the holding company of the $113 billion “salt-to-software” conglomerate, has not yet officially confirmed its interest in the airline. The company reportedly submitted the EoI for Air India slightly before the end of the deadline on December 14, 2020. Tata Sons is believed to have entered the bidding through AirAsia India, its joint venture with AirAsia Group in which it holds a controlling stake 51%. In November 2020, Tata Sons reportedly tried to negotiate with Singapore Airlines (SIA1) (SINGY) (SIA) through their joint venture Vistara, offering the airline to rule out a non-compete clause and join the proposed bid for Air India. However, SIA denied taking part in the initial stages of the bid.
The government has scheduled the deadline for the submission of physical bids for December 29, 2020. After the bids are submitted, the government will form the list of bidders by January 5, 2021.
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