JOIN USKolkata-based businessman Pawan Ruia eyes 100% stake in Air India: Report
Even as the Tata group and a consortium of employees have expressed their interest to buy stake in the Indian national carrier, Air India, a new player has now enetered the race.
Kolkata-based Ruia Group Chairman Pawan Ruia has submitted an expression of interest (EoI) to buy a 100 per cent stake in Air India, according to a Business Standard report.
Ruia, known as a “turnaround tycoon” after the takeover of financially stressed companies like Jessop & Company, Dunlop India and Falcon Tyres in 2005 for a short period of time, is well known among business circles in Kolkata. However, he was stripped of his 'tycoon' title after the companies entered the Board for Industrial and Financial Reconstruction as they now face liquidation.
DH couldn't independently verify the report.
The EoI was submitted under a consortium led by Kanti Commercials Private Limited — a company associated with the Ruia group, according to the publication.
However, Ruia is unlikely to win unless he brings in a financial partner or a large company to support his bid, experts told BS.
“I would doubt that Ruia alone has the ambition to acquire and turn around a company like Air India. He may have a financial backer,” a corporate lawyer from Kolkata told the publication.
Ruia is a chartered accountant whose businesses, according to the report, range from sugar to textiles and heavy engineering to tyres.
Who has bid for Air India?
Air India is currently undergoing disinvestment process and salt-to-software conglomerate Tata Group and US-based fund Interups Inc are among "multiple" entities that have put in preliminary bids for buying loss-making carrier. A group of 219 Air India employees has also submitted an expression of interest (EoI) for the carrier in partnership with Interups.
Also read: The employee group that bid for Air India
Disinvestment of Air India would be completed in 2021-22, Finance Minister Nirmala Sitharaman had said while presenting the Union Budget.
The government is likely to reveal the names of qualified bidders in the coming weeks. The last date for submission of bid expired on December 14, 2020.
The government restarted Air India's disinvestment process in January 2019. This time, the government is selling its entire stake in the state-owned airline, including Air India's 100 per cent shareholding in Air India Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
The government has relaxed the bidding norms for the carrier wherein the net worth for potential bidders fixed at Rs 3,500 crore and minimum stake for an individual consortium partner lowered to 10 per cent. The networth criteria was Rs 5,000 crore in the 2018 bid document.
The government had decided in 2019 that Air India's disinvestment would be done on the basis of enterprise value instead of equity value to make the carrier more attractive to prospective buyers.
Enterprise value is calculated by considering debt as well as cash with the company.
The government made it clear in October that a minimum of 15 per cent of the enterprise value quoted by the bidder would have to be paid in cash and the rest can be taken as debt with Air India.
(With PTI inputs)