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UAE: RAK Government denies Air India bid reports
Dubai - 'Neither the Ras Al Khaimah Government nor any of its related entities are connected to any such potential transaction'
The Ras Al Khaimah Government has clarified that it is not connected to any "potential transaction relating to Air India".
In a statement issued on Sunday, a government spokesperson said it was "aware of a story circulating in the international and local media of a potential transaction relating to Air India, the national air carrier of India"
The reports cite that one of the parties involved is a Ras Al Khaimah Government institution.
"Neither the Ras Al Khaimah Government nor any of its related entities or authorities are in any way connected to any such potential transaction relating to Air India,” the spokesperson added.
The denial came as reports said that the much-delayed sale of Air India is likely to complete within months, with the Indian government officially shortlisting Tata Group and a consortium.
The consortium led by SpiceJet boss Ajay Singh also includes Ankur Bhatia, promoter of Delhi-based Bird Group, a technology provider to the travel and aviation industry.
The final bidders will have access to key details about Air India for due diligence in the coming weeks before placing their final bids for the airline.
Under the privatisation bid, the Indian government is offloading its entire 100 per cent stake in the ailing carrier that has been in losses ever since its 2007 merger with domestic operator Indian Airlines.
The shortlisting of the final two contenders was announced following the rejection of an Expression of Interest proposed by the employees of Air India on ground they were not able to meet the eligibility requirements.
The salt-to-software conglomerate Tata group’s holding company Tata Sons has submitted an EoI. The Mumbai-based $113-billion Tata group is expected to bid through Air Asia India. However, the Tatas’ joint venture partner in Vistara, Singapore International Airlines, is not interested in becoming a partner for the bid.
Informed sources said the due diligence and bidding process will at least take another two to three months before completion. This means it is unlikely that a final bidder would emerge until at least late this summer or even the winter considering delays. The government hopes to wrap up the process by the second quarter of the fiscal year (July 1st -30th September).
For the Tata group, which also owns the majority shares of full-service Vistara (in partnership with Singapore Airlines) and low-cost AirAsia India, the acquisition of Air India marks the homecoming of an iconic brand that was invented by the legendary JRD Tata in 1932.
Air India’s total debt is currently estimated at roughly Rs900 billion ($12.4 billion), with another huge Rs100 billion ($1.37 billion) loss expected for the last year. The figure does not include the government write-offs and other reductions (bringing the figure closure to $4 billion), any bidder will have to take on billions in debt to start with.
It is learnt that under the terms of the sale, the winning bidder will have to pay 15 per cent of the airline’s enterprise value in cash and take the rest on as debt.
— issacjohn@khaleejtimes.com
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