An Air India consortium of employees has been ruled out of the bidding process to take over the airline. The consortium, led by board member Meenakshi Mallik, issued a statement yesterday explaining why it did not qualify. The latest elimination means the bidding process is down to the final few contenders now.
The race for the purchase of Air India continues to shrink further. This week, a consortium of Air India employees was ruled out of the privatization process by the government for failing to meet the conditions of the sale.
The consortium was led by the Director of the Air India Commercial, Meenakshi Mallik, and represented 209 employees. The employee’s bid was also backed by investment firm Interrups, which pulled out of the sale in December.
According to a statement seen by Mint, the bid was ruled out due to issues with the consortium’s foreign investors, a financial fund based out of Seychelles. The statement lays out three reasons for the failed bid, all of which are to do with failure to provide required documentation or failing to qualify as a ‘regulated foreign investment fund’ as defined by the process.
However, Ms. Mallik was quick to point out the government had no issues with the employee group’s submissions, saying,
“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.
“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.”
The Air India race has likely narrowed down to two competitors: the Tata Group and SpiceJet CEO Ajay Singh. However, the government has previously removed the deadline to publicly announce the bidders, which means it is possible other bidders are involved.
Based on the information available, it is very likely that Tata and Ajay Singh (not as CEO of SpiceJet but rather in a personal capacity, according to Business Today) are leading bidders for the airline. They will soon have access to internal Air India details to complete due diligence and put forward their bid.
The government originally planned to complete the sale process by this fiscal year (ending March 31st). Now, the process plans to end sometime in the next year, if all goes well. However, considering the repeated delays to the process, do not expect a final winner for the next few months.
Who do you think will take over Air India? What will the airline look like in the future? Let us know in the comments!