As Union Cabinet relaxes norms for NRIs (non-resident Indians) to buy 100 per cent stake in the national carrier, sources in the aviation ministry confirm that two potential buyers have bought access to virtual data room that provides additional information on Air India, Air India Express and AISATS - the three entities that are up for sale.

Virtual data room, which also has draft share purchase agreement (SPA), can be bought by potential buyers of Air India on the payment of (non-refundable) fees of Rs 1 crore. So far, two bidders have bought access to this service highlighting their keen interest in acquiring Air India along with its subsidiaries. Virtual data room covers wider details about Air India and its subsidiaries which are not part of the EoI (expression of interest) document floated by the government in January.

"Interested bidders also have the option to access the virtual data room containing additional information about companies as well as the draft share purchase agreement prior to submitting the EoI," the sale document says.

On January 27, the government had released the preliminary information memorandum (PIM) inviting the EoI from prospective buyers of Air India and its two subsidiaries. Under the sale process, the government intends to sell 100 per cent stake in Air India and Air India Express, and 50 per cent stake in the ground-handling arm AISATS (Air India SATS Airport Services Private Limited).

The whole transaction is divided into two stages. The last day of submitting the EoI is March 17, and qualified bidders will be notified on March 31. Recently, on March 2, the government announced that it is extending the date for submission of written queries (on PIM and SPA) to March 6 for the potential bidders. The initial deadline for submitting the queries was February 11. "This seems to indicate that the deadline to submit the EoI could be extended further," says the ministry official who didn't wish to be quoted. It's likely that the last date could now be extended to March 25 which would give more time to potential bidders, including NRIs, to study Air India's books and take a call.

Some reports suggest that entities like Tata Group, Gautam Adani-led Adani Group, Hinduja Group, low-cost carrier IndiGo and New York-based fund Interups are interested in acquiring the loss-making Air India. Tata Group has reportedly engaged the consultancy firm Deloitte to help it with the transaction.

This is the second attempt by the government to sell Air India in the past two years. Since it failed to attract any bidders in 2018, the government sweetened the deal this time. For instance, the government is open to sell 100 per cent stake and give full management control to the new owner which was not the case last time when it wanted to divest 74 per cent stake. Then, in the current sale process, the new buyer would be asked to absorb Rs 23,286.5 crore of debt and the rest of the AI's debt - that is about Rs 36,788 crore would be transferred to the special purpose vehicle Air India Assets Holding Ltd (AIAHL). This is a big relief especially because as per the previous EoI, the buyer had to take over Rs 33,392 crore of debt and liabilities as part of debt reallocation. In addition, the government has reduced the net worth eligibility of the bidder from Rs 5,000 crore to Rs 3,500 crore. Also, the lead bidder in a consortium can have 26 per cent shareholding as against 51 per cent before.

Though Air India reported operating profits of Rs 177.2 crore during April-November 2019 period, it has been one of the worst affected airlines in India due to the novel coronavirus outbreak. That's because a bulk of the airline's revenues come from the international operations which has been curtailed significantly as almost 84 countries battle with coronavirus spread.

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