One of India's largest conglomerate Tata Group, which has its footprint across industries, is unlikely to bid for Air India (AI) as the government's divestment terms are too burdensome, according to a report on Reuters. On part of Tata Group, the sources said that the group was not happy with the idea that the government retained 24% stakes of Maharaja and Air India.
The government in one of its conditions has said that the winning bidder can not merge the airline with existing businesses as long as the government holds a stake. The victor may also be required to list Air India and would need to abide by conditions created to safeguard employee interests, restricting its ability to cut staff.
Two weeks after the civil aviation ministry came out with the preliminary information memorandum (PIM) on Air India's strategic disinvestment, the nays seem to be coming faster than any expressions of interest. "It is a bold step", Jet Airways' deputy chief executive, Amit Agarwal said in a statement emailed to AFP.
In one sense, the government's decision does clarify Air India's divestment process as now only those who have the financial standing to bid for the airline in its entirety will remain.
On a question if ministry was open to the idea of selling Air India's domestic and global operations separately, Chaubey said, "Currently, we are not looking at the option of splitting Air India's operations".
India, keen to sell the loss-making Air India, finalised plans in late March to divest a 76% stake and offload about $5.1 billion of its debt.
He further added that the government meant to make the divestment process to the "earliest" and asserted that Air India's operations would not be split in the bidding process.
Air India ran losses for almost a decade after a botched merger in 2007 and has debts of around Dollars 7.67 billion according to government figures.
"Also, as we have communicated before, we do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India's airline operations", Ghosh said in response to queries from investors regarding IndiGo's involvement in the upcoming divestiture of Air India.