Mumbai: The Air India employee consortium that had put in an Expression of Interest for the privatization of the national carrier, has not made the cut to the next round of divestment.
In a three-page letter to employees, Meenakshi Mallik, Commercial Director, informed the consortium that it was not shortlisted.
“As of late last night, I have seen an email from the Transaction Advisor to the Government of India (Ernst & Young LLP), informing the Employees of Air India that we have been unsuccessful in qualifying to the next phase of the ‘Disinvestment Acquisition process’,” she said. Malik was leading the employee consortium.
The letter spells out three reasons for the Expression of Interest of the employees being disqualified. These include: reasons are non-submission of required three years audited financial statements for foreign consortium member, non-submission of information or details by interested bidders for investments in offshore companies, which forms a substantial part of the net worth of the foreign consortium member, and the foreign consortium member not being an appropriately regulated foreign investment fund as defined in the Preliminary Information Memorandum.
“It was certainly upsetting to read this, but what I found reassuring in the email is that the government had no objection or reservation whatsoever with any of the documentation furnished on behalf of the employees,” Mallik’s letter reads, adding that, “this can only mean that the employees’ documentation was, in fact, perfect, which is a clear reflection of not just our sincerity in the process but also of our competence to have participated and, if selected, to run our airline,”
“While it is flattering to note that many wanted to associate themselves with us, we were, in fact, partnered with a financial fund based out of the Republic of Seychelles and dealt exclusively with it through the disinvestment process,” the letter adds.
While Tata Group which also owns 51% of Vistara and AirAsia India, is a confirmed entity in AI’s bidding process, promoter of SpiceJet is also said to be in the race too, though the airline has not confirmed this.
The government aims to complete the privatization of the national carrier in 2021-22.
Last month, the department of investment and public asset management (DIPAM), which works under the finance ministry, said that the identity of potential Air India bidders will remain confidential with the transaction adviser and may be shared in national interest with specific agencies only on government advice.
“Each of the potential bidders will be assigned a code by the transaction adviser. All activities including due diligence, site visits, bidding, etc, shall be performed using the code only,” DIPAM said in a statement, adding the code will be the identity of the bidder