No takers for Air India as Tatas decide to opt out

• The prospects of an early sale of loss-making Air India seem to be getting thinner by the day, as no one seems interested in an airline where the Indian government continues to hold a stake. A report today says the Tata Group, widely seen as a potential suitor for the debt-ridden national carrier, is unlikely to consider a bid as the government's terms are too onerous.
• The Union government finalised plans in late March to divest a 76-per cent stake in the loss-making airline and offload about $5.1 billion of its debt.
• But the government has stipulated the winning bidder cannot merge the airline with existing businesses as long as it holds a stake. The winner may also be required to list Air India and would need to abide by conditions to safeguard employee interests, restricting its ability to cut staff.
• Since the terms were disclosed, no company has come forward to reaffirm previous interest. Jet Airways and IndiGo have already publicly said they are no longer interested.
• The Tata Group, which already has stakes in two airline joint ventures in India, does not see "how a deal would be workable" under the current terms, according to an unnamed source cited by The Economic Times.
• The source also said the airline had too much debt and noted there was little clarity on what a buyer would be allowed to do with the airline's bloated workforce.
• "Anyone who puts money upfront ... even for Tata to put in that kind of money, it would want complete control," added a second ET source.
• Tata Sons, the holding company for the conglomerate Tata Group, declined to comment.
• Prior to the disclosure of the terms, there had been some expression of interest from the group. In January, Leslie Thng, the chief executive of Vistara, a joint-venture between Tata and Singapore Airlines told reporters its owners were open to evaluating a bid for Air India.
• Vistara declined to comment and Singapore Airlines had no immediate comment on Wednesday.
• Last October, Tata Group chairman N Chandrasekaran said in a TV interview the group would "definitely look" at Air India once the privatisation process was finalised. Source: https://www.domain-b.com/

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