Mumbai : The ambitious strategic stake sale of national carrier Air India and its two subsidiaries seem to be facing turbulence with yet another potential bidder deciding to stay away from the bidding process.
Tata Group, which is widely seen as a potential suitor for the state-run carrier, on Wednesday said it is unlikely to consider a bid for the carrier as the government’s terms are just too onerous, according to a Reuters report, citing sources.
A lack of interest from Tata is likely to put pressure on the government to rethink its terms or even the structure of the sale.
Kicking off the disinvestment process, the government has come out with a detailed preliminary information memorandum, detailing plans to offload up to 76 per cent stake in Air India and transfer the management control to private players.
On Tuesday, Jet Airways said it would not be participating in the Air India disinvestment process, becoming the second domestic airline after IndiGo to make such a decision.
Tata Group, which already owns stakes in two airline joint-ventures in India, does not see “how a deal would be workable” under the current terms, the Reuters report added.
“Anyone who puts money upfront … even for Tata to put in that kind of money, it would want complete control,” the report said, quoting sources. According to the memorandum, issued on March 28, the government would retain 24 per cent stake in the national carrier, the winning bidder would be required to stay invested in the airline for at least three years.
Potential bidders ‘arm twisting’ govt
MUMBAI: Alleging that the probable bidders are using “arm twisting tactics” to force the government sell the national carrier for cheap, a forum of 10 Air India unions has said that it will take up the issue with the PMO and the civil aviation ministry, among others.
In a statement issued, the forum also reiterated its opposition to the privatisation of the airline, saying that “it (Air India) is our national pride and it served the nation many a times in need.” “The so-claimed probable buyers are using arm twisting tactics so as to put pressure on the government to succumb to change the terms and conditions best suited to them and the Air India is sold for a song,” the unions said.