Tata, Spicejet left in race to acquire Air India, other EoIs rejected: report

Tata Group and private airline Spicejet are the only remaining bidders for acquiring Air India as all the other expressions of interest (EoI) have been rejected after evaluation, reports citing sources close to the development said.

The odds seem to favour Tata Sons, which is reported to be planning consolidation of its aviation business comprising the two joint ventures of Air Asia and Vistara.
The group is also reported to be setting up a strategy team headed by group chief financial officer Saurabh Agrawal to explore various possible solutions such as mergers and on rebranding its airline ventures, reports citing sources close to the development said.
All other EoIs, including that by a consortium of Air India employees, supported by a group of non-resident Indians, were rejected after the evaluation of the expressions of interest (EoI).
The Air India employee consortium that had put in an Expression of Interest for the privatisation of the national airline, hasn't made it to the next round of divestment,  leader of the the emp;oyees consortium and the airline's commercial director Meenakshi Malik said the consortium hasn't been 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. 
"While I write to you with a heavy heart on the outcome of our bid to acquire Air India, I cannot help but be filled with a great sense of pride and admiration for the sincere efforts we have made over the last few months, together," Malik said in the letter.
"The EoI and the supporting documents submitted by you have been duly evaluated and have been found to not fulfil the eligibility requirements set out in the Preliminary Information Memorandum (as amended) (PIM) issued in respect of the strategic disinvestment of Air India Limited (AI) and is liable for disqualification, including on account of:
(A) non-submission of required three years audited financial statements for foreign consortium member…….;
(B) non-submission of information or details by IB ……for investments in offshore companies, which form substantial part of Net Worth of foreign consortium member…….; and
(C) the foreign consortium member not being an appropriately regulated Foreign Investment Fund as defined in the PIM…... Accordingly, we hereby inform you that, you have been disqualified from proceeding to Stage II of the strategic disinvestment of AI."
With the exit of the consortium, which had later also got support from NRI businessman Laxmi Prasad and his Interups Fund, Tata Sons becomes a clear favourite to buy Air India. Sources added that SpiceJet may also be in the reckoning.
The transaction advisors are reported to be in touch with the interested bidders regarding queries on bid rejection and the qualified bidders will be intimated only after the government is satisfied with responses from the bidders, reports said. 
Once the list of bidders is finalised, which is the first stage, and bidders are shortlisted on the basis of the eligibility criteria, interested bidders will be provided with a request for proposal (RFP) and thereafter there will be a transparent bidding process.
As per the eligibility criteria set by transaction advisor EY, which is currently assessing the EoIs from potential parties, a bidder should have a net worth of Rs3,500 crore.
Under the RAF, which will have additional details on the divestment, bidders will provide additional details of their offer. This will be followed by the bidders placing a financial bid.
Apart from Air India, the government will also sell Air India Express and of 50 per cent shareholding in Air India Airport Services Private Ltd.
The government is hoping to raise approximately Rs15,000 crore from the sale of Air India, its subsidiary Air India Express and AISATS - a 50:50 joint venture partnership between Air India and Singapore Airport Terminal Services (SATS) Limited.