According to a report, Singapore Airlines (SIA) has waived off a non-compete clause and is unlikely to partner Tata Sons to bid for the beleaguered national carrier Air India.
In December, Tata Group filed an Expression Of Interest (EoI) for the contested airline.
The non-compete agreement was a barrier to Tata Sons’ individual bid for Air India.
The main reason for SIA’s hesitancy is said to have been the long-term funding that the debt-laden carrier will need to run operations, people with knowledge of the matter told ET.
It is worth noting here that in January 2020 the centre had submitted offers to sell 100 per cent of its stake in Air India and its international arm Air India Express, as well as 50 per cent of the Air India SATS Airport Services, the ground-handling joint venture.
As per the report, Tata had started discussions with SIA to abandon a non-compete agreement and join an offer for the troubled airline.
Tata Sons can’t bid without SIA’s nod and its waiver of the no-compete clause. Tata could opt for solo bid or go through its AirAsia India unit, in which it has been raising its stake, lowering that of joint venture partner AirAsia Bhd.
Although there are some legal issues regarding the Tata Group using AirAsia India as the vehicle to buy Air India, the group can work around them, the financial daily mentioned citing executives.
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“Submitting an offer by a particular company is just a formality and not a challenge. The real work begins when EY begins due diligence on the offer as soon as the government grants us access to the data room,” the publication quoted a group leader as saying.
The government is likely to move the process forward after shortlisting bidders for the national carrier by the end of the month.
(Source: ET Now)