New Delhi: Air India Ltd’s domestic and international operations will be sold together, and not separately as some potential suitors would want it to be.

“What we will be offering through the bidding process is the integrated airline which means international and domestic both," minister of state for aviation Jayant Sinha said at a briefing on Friday.

The airline also has subsidiaries such as Air India Express which flies mostly to the Middle East, Alliance Air that runs regional operations as also key units for engineering and ground handling among others, with sizable infrastructure and expertise.

Air India’s domestic and international operations are also part of the Star Alliance, the largest airline grouping in the world, while smaller arms are not.

Sinha indicated that some subsidiaries could also be sold as part of the main airline and bidders would have the option to make multiple bids. 

“We are in the process of working out exactly which subsidiaries will be with the airline and which will be offered separately. Even if they are offered separately, you can bid for each one of them and reintegrate them if you want. So we are providing flexibility in the bidding process," Sinha said, adding that the transaction adviser will call for multiple bids which includes one for an integrated Air India and the rest for subsidiaries. 

The entire process of awarding the assets to the successful bidder will be done in six-eight months from now and thereafter transfer of assets and legal approvals will follow, he added. 

Over the next few weeks, transaction adviser EY will put together a data room and a CIM (confidential information memorandum), said Sinha.

A CIM is a document drafted by an advisory firm or an investment banker and used in a sell-side engagement to market a business to prospective buyers after collecting all the information about the company, while a data room is an online warehouse of key documents about a company. 

A decision on issues like retaining the Air India brand name, said Sinha, will be part of the terms of sale which are yet to be decided by a group of ministers led by finance minister Arun Jaitley. 

Among major contenders, IndiGo (InterGlobe Aviation Ltd) and the Tata group have shown interest in the airline. IndiGo has said it is keen only on the international arm of Air India, while Tatas have said they would like to see the offer before taking the next step.

Sinha said though the Tatas have made public statements of interest in Air India, there is no formal letter like the one sent by IndiGo. 

Air India had a total debt of Rs48,877 crore at the end of March 2017, of which about Rs17,360 crore was aircraft loans and Rs31,517 crore working capital loans.

Some of the debt is expected to be shifted to a special purpose vehicle before the sale to make the airline attractive. 

To a question on whether there was a need to privatize Air India when the debt (which has been seen as the main reason dragging the airline down) is being kept aside, Sinha said there was no rethink on the subject.

“It is a global experience and our own that when the private sector operates in certain areas where there are largely private sector players, the private sector can provide much better services and a much better product than the public sector can," he added.