It has also mandated that potential bidders will sign a “non-disclosure undertaking” about not revealing their identity. The government has appointed Ernst and Young LLP India (EY) as the transaction advisor for AI.
“The TA shall strictly maintain the confidentiality of the potential bidders from all persons including persons in government including the CPSE and non-government. However, if required, information may be shared with specified agencies in national interest upon an advice by the administrative ministry in writing,” DIPAM, which comes under the finance ministry, said in a note tweeted by the aviation ministry on Friday.
“Each of the potential bidders shall be assigned a ‘code’ by the TA. All activities including due diligence, site visits, bidding shall be performed using the ‘code’ only. The ‘code’ should be allotted in a manner that masks information about the identity, profile and the number of potential bidders/bidders, during the entire process of disinvestment. The TA shall issue an authorisation to the potential bidder for the diligence mentioning only the ‘code’ as ‘identity’,” it adds.
As per the process of the disinvestment, the Expression of Interest in response to PIM by any group or entity were… https://t.co/SE1BzmAufH
— MoCA_GoI (@MoCA_GoI) 1612514458000
“A non disclosure agreement shall be signed by the potential bidder, inter alia, undertaking that the entity and its employees shall not reveal their identity and / or contact any member of CPSE or administrative ministry/DIPAM and also keep data/ information of CPSE strictly confidential.”
The government has received “multiple expressions of interest (EoI)” for Air India before the December 14, 2020, deadline. While the biggest name and strongest contender remains AI founder Tata Group which is learnt to have submitted via its AirAsia India, others who did so include a group of AI employees.
The eligible bidders will compete by bidding on enterprise value (EV) basis. The government had earlier removed the January 5, 2021, for notifying qualified bidders for Air India. The TA will now inform the qualified parties that submitted their EOI for the airline.
Qualified bidders are required to take on a pre-fixed level of Rs 23,000 crore debt of the airline, they will now quote an EV based on their estimate of the combined value of AI’s equity and debt.
Winning bidders will be decided on who quotes the highest EV value and at least 15% of this value will need to be paid in cash while the rest can be taken on as debt.