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Business News/ Companies / Air India privatisation: 14 firms pitch to become sale, legal advisers

Air India privatisation: 14 firms pitch to become sale, legal advisers

Fourteen firms, including KPMG, BNP Paribas and Rothschild, have applied to advise the government for the strategic sale of Air India and its subsidiaries

Air India has a debt burden of more than Rs50,000 crore. Photo: MintPremium
Air India has a debt burden of more than Rs50,000 crore. Photo: Mint

New Delhi: As many as 14 firms have expressed interest to act as transaction and legal advisers to the government for the privatisation of Air India Ltd.

KPMG, BNP Paribas, Rothschild India Pvt. Ltd, EY, Grant Thornton, Edelweiss and ICICI Securities Ltd will make their presentations on Friday to the government, Department of Investment and Public Asset Management (Dipam) said on its website on Thursday.

Law firms Hammurabi and Solomon Partners, Cyril Amarchand Mangaldas, Shardul Amarchand Mangaldas, Crawford Bayley and Co, Luthra and Luthra, ALMT Legal and Trilegal will vie to become the legal advisers to the government for the sale of Air India.

The financial bids submitted by the firms will be opened immediately after the presentations are completed, the department said in the note.

In mid September, Dipam had sought expressions of interest for transaction advisers and law firms which were to be submitted by 12th October. Subsequently, the government had called interested parties for discussions.

The selected firms will help the government value the assets of the state-run airline. Debt-laden Air India has vast assets including intangibles like airport slots, international flying rights among other things. It also has valuable real estate globally. The airline has about 17% share of traffic on routes linking India to international destinations and 13% of the domestic market. Among those waiting for the details of the sale is the Tata group, which started the airline in 1932 before it was nationalized

“We will definitely look at it," Tata Sons Ltd executive chairman Natarajan Chandrasekaran said in an interview aired on CNBC-TV18 on 10 October. “We still don’t have all the details. Every business proposal will be very seriously looked at and we will look at that (Air India). Definitely. But currently we don’t have the data... there are so many different groups within Air India and then there is real estate, there is debt, there are liabilities and we got to look at all of that it but we will definitely look at it."

InterGlobe Aviation Ltd, which runs IndiGo, Bird Group, Turkey’s Celebi are among companies that have shown interest in buying some parts of Air India.

The government will have to be careful in valuing the airline fairly and include any important lessons learnt from selling similar public sector in the telecom space in the last decade, said Steve Forte a former Jet Airways chief executive who is now based in New York.

“If done correctly and responsibly I think this will improve the government’s image. Sure it will cause some jobs to be eliminated and the labour unions and the persons that will be affected will blame the government, but privatization is the right road to take if they want to save Air India and give it a hopeful future."

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Published: 26 Oct 2017, 06:49 PM IST
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