Andrzej Jeziorski/SINGAPORE
The Indian Government has received at least 10 formal expressions of interest from potential investors in state-owned carriers Air India and Indian Airlines, which are due to be partially privatised next year. The deadline for submissions was 10 November.
Some 60% of flag carrier Air India is to be sold - 10% to domestic institutions, 10% to employees and 40% to strategic partners. A foreign carrier may take part of this latter stake, amounting to no more than 26% of the airline. Some 51% of domestic carrier Indian Airlines will also be sold, with up to 26% offered to a strategic investor, which may be no more than 40% foreign-owned and which cannot include foreign airlines.
Local press reports say six submissions were received for Air India and four for Indian Airlines, although Air India claims the number was higher.
The government declines to confirm the bidders' identities, but parties interested in Air India are believed to include a consortium led by the Tata Group, including Singapore Airlines (SIA); the Hinduja Group; and the Indian Pilots' Guild (IPG), which is seeking a majority stake in an employee takeover with the backing of Air India's 18,000-strong workforce. There is some doubt, however, that the IPG will be able to meet a requirement that a bidder's net worth exceeds $225 million without entering into a partnership.
Formal expressions of interest were expected from an Air France/ Delta Air Lines partnership, and from Emirates - although they have not revealed their Indian partners.
British Airways and Qantas, once tipped as potential Air India bidders, are now providing technical advice to an Indian consortium led by Ispat International in its bid.
Air India says the expressions of interest will be examined by J M Morgan Stanley, to determine which meet the government's requirements. Those which qualify will be given access to company data and business plans and asked to submit formal bids next April. The airline hopes the privatisation will be completed by May - missing the government's March target.
Parties interested in Indian Airlines are thought to include Hinduja and Videocon International.
Source: Flight International
