Employees of Air India have stepped forward to bid for the Airline — which has incurred a debt of about Rs 90,000 crore — along with a financial partner. While a single employee will have to contribute not more than Rs 1 lakh for a 51 per cent stake, the investor will have 49 per cent stake.
The group of employees who have come forward to invest are seeking help from a private equity (PE) fund, as they are not in a financial position to bid alone.
Presently, there are 14,000 employees in Air India, and once the first stage is completed, that is expression of interest (EoI), if each of them contributes Rs 1,00,000, they can manage to gather a significant sum.
The Tata Group is amongst the other bidders. The last date for placing bids is December 14, and the bidders who qualify will be notified in two weeks, by December 28, provided there are no more delays owing to the pandemic situation.
However, other issues, such as how the profits will be distributed, and who will head the Airline’s operations as CEO and whether more funds will be needed in future are yet to be given a thought or discussed.
Air India was moving in the direction of divestment when the COVID-19 outbreak brought things to a halt.
Despite its poor financial situation, no employees were laid off. Instead, the carrier had resorted to a leave without pay (LWP) scheme.