As the final date to submit expressions of interest (EOIs) in Air India (AI, Delhi International) looms on August 31, Tata Group, which has emerged as a serious bidder for the beleaguered flag carrier, is reportedly hunting for financial partners to join in its bid, the Business Standard reported.
The group would offer the partners a minority stake in the special purpose vehicle it will use to bid for the airline, a source close to the matter told the newspaper.
A number of international private equity funds are apparently ready to take up the offer, keen to tap into Tata's experience running two airlines, Vistara (Delhi International) and AirAsia India (Bengaluru International). The group also carries an ethical track record.
“Tata Group will have to choose from the various offers they are getting. A final decision will be taken before the EOIs are submitted,” the source assured.
Though it has the means to invest in Air India alone, Tata Group has encountered unexpected turbulence at one of its businesses, Tata Teleservices. Also, a financial partner with global experience would be useful, a source at the group said.
Such a bid is not likely to meet stiff opposition. With the covid-19 pandemic still raging, offers for Air India are expected to be muted.
Tata will, however, have to sort out issues surrounding its AirAsia India (Bengaluru International) joint venture with AirAsia Group. The Malaysian partner wants to sell its 49% stake for USD50 million, an offer Tata is evaluating. A final decision on AirAsia India’s fate is imminent, according to another unnamed source.
“There are likely to be two transactions. AirAsia will sell its stake in the local JV, and the new financial partner will be offered the stake in AirAsia India as well as the option to bid for Air India,” the source said.
