Tata Group likely to bid for Air India after 1953 exit

New Delhi, Dec 13: Government-owned Air India is once again on the block, Tata Group is believed to have submitted an expression of interest for the beleaguered national carrier Air India.

The Tata group has already started working on the structure for such buyout, including a merger of AirAsia India, in which they hold 51 per cent in Air India Express, a 100 per cent subsidiary of the government-owned national carrier.

The government is seeking to sell 100 per cent of its stake in the state-owned national airline, including Air India''s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Pvt Ltd.

In January this year, the government restarted the divestment process and invited bids for selling 100 per cent of its equity in the state-owned airline, including Air India''s 100 per cent shareholding in Air India Express Ltd, which is the international budget arm and 50 per cent in Air India SATS Airport Services Private Ltd.

As per the Air India EoI floated by DIPAM in January, of the airline''s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.

A popular valuation methodology for takeover deals - Enterprise value (EV) is a measure of a company''s total value, often used as a more comprehensive alternative to equity market capitalization.

EV includes in its calculation not only the market capitalisation of a company but also short-term and long-term debt as well as any cash on the company''s balance sheet.