Air India said law firms bidding for the process must have handled at least five merger and acquisition deals particularly for listed businesses in India or PSUs.
Flag carrier Air India is looking to hire a law firm for due diligence process for proposed disinvestment of its three businesses — Air India Ltd, Air India Express Ltd, and Air India SATS Airport Services Ltd. Air India has invited bids from law firms to review and summarise “material contracts entered into by AI entities”, “all cases filed by or against the AI entities” and highlight liabilities, if any in these cases, along with “all labour-related issues,” according to the tender available on the website. The last date for submitting bids by law firms is November 8, 2019.
The area of diligence spans across the group’s contracts valued over Rs 50 crore including service level agreements, aircraft lease agreements, fuel agreements, airport lounge facilities agreement etc., along with licenses obtained or returns filed under labour legislation from 2016 onwards, employee benefits, employment-related agreements and labour law disputes.
Air India said law firms bidding for the process must have handled at least five merger and acquisition deals particularly for listed businesses in India or PSUs and that there should not have been engagement between the bidder and an Airline or any other agency for acquisition of Air India or its assets to avoid conflict of interest — among key criteria stipulated by the carrier.
The airline’s debt and other liabilities were nearly Rs 70,000 crore as on March 31, 2019, even as it is likely to undergo privatisation this year and share a significant amount to the government’s disinvestment receipts, Financial Express had reported earlier this month. The Maharaja has a fleet of 128 aircraft out of which it owns 70 planes, including wide-body Boeing 787-800 Dreamliners while the rest are on lease. Its losses are estimated to have grown from Rs 6,453 crore in FY17 and Rs 5,348 crore in FY18 to Rs 7,635 crore in FY19.