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Air India seeks bidders with net worth of Rs 3,500 cr

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Hardeep Puri

New Delhi, Jan 27 : Bidders for the national carrier, Air India will need to have a minimum net worth of Rs 3,500 crore — whether as sole bidder or a consortium.

The government on Monday kicked off the strategic disinvestment of Air India with Ernst & Young, transaction advisor issuing an expression of interest by the Government of India (GOI) for advising and managing the proposed strategic disinvestment of Air India Limited (AI) by way of transfer of management control and sale of 100 per cent equity share capital of AI held by GOI.

AI inter alia holds 100 per cent equity share capital of Air India Express Limited (“AIXL”) and 50 per cent equity share capital of Air India SATS Airport Services Private Limited (“AISATS”) (together with AI and AIXL referred to as “Companies”).

The Expression Of Interest (EOI) prescribes the financial capability conditions for the interested bidders. For submitting the EOI and for being considered for subsequent qualification for Stage II of the Proposed Transaction, the IB (whether a sole bidder or a Consortium) will have to satisfy the criteria of having a minimum net worth of Rs 35,000 million or Rs 3,500 crore.

Net worth means the aggregate value of the paid-up equity share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet.

The EOI also stipulates a minimum stake requirement in the consortium and company. Each member of the Consortium shall hold at least 10 per cent interest in the Consortium and at least 10 per cent equity share capital of the company (special purpose vehicle) to be promoted by the members of the Consortium for acquiring the GOI stake being disinvested in Air India.

The lead Member shall hold at least 26 per cent interest in the Consortium and at least 26 per cent of equity share capital of the company (special purpose vehicle) to be promoted by the members of the Consortium for acquiring the GOI stake being disinvested in Air India.

The net worth of each participating member (on their own or through its Affiliate) should be equal to or more than 10 per cent of the Net Worth/ACI requirement for the Consortium (i.e. 10 per cent of INR 35,000 million). However, if the member of the Consortium is a Scheduled Airline Operator in India, the condition to meet minimum share of Net Worth requirement shall not apply to such member provided interest (in Consortium) and equity shareholding of such member in the company (special purpose vehicle promoted by the members of the Consortium for acquiring the Company) is restricted to maximum of 51 per cent.

Where a sole bidder or a Consortium has submitted the EOI, it is expected that there shall not be any changes in the members of the Consortium or sole bidder will not form a Consortium except in specific conditions.

Any change prior to the EOI Deadline is permissible by withdrawing the EOI and submitting a fresh EOI before the EOI Deadline. However, no change in composition of Consortium will be permitted after the EOI deadline till the shortlisting of the Interested Bidders (IBs).

If after shortlisting of IBs, a Consortium bidder desires a change in the Consortium or a sole bidder desires to form a Consortium by inducting new members, it shall have to apply for approval for such change to the TA no later than 21 days from the date of issue of the Request For Proposal (RFP). Endeavour shall be made to provide approval or disapproval for such a change no later than 21 days from the date of receipt of such application by the TA.

The EOI has also laid down the lock-in provisions applicable for the proposed transaction. For a period of one year from the date of the closing of the Proposed Transaction, the Confirmed Selected Bidder (and/or the special purpose vehicle in case investment in AI is made through a special purpose vehicle) shall not, directly or indirectly, transfer any equity securities of AI held by it, including the legal or beneficial ownership thereof with or without any of its rights or obligations under the definitive documents, to any person.

The Confirmed Selected Bidder shall not, directly or indirectly, transfer any equity securities of the special purpose vehicle (in case investment in AI is made through a special purpose vehicle) held by them, including the legal or beneficial ownership thereof with or without any of its rights or obligations under the definitive documents, to any person.

AI shall not, directly or indirectly, transfer any equity securities of AIXL and AI-SATS held by it, including the legal or beneficial ownership thereof with or without any of its rights or obligations under the definitive documents, to any person.

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Bank credit growth may rise 200-300 bps next fiscal: Crisil

Incremental net domestic credit this fiscal up to December 2019 is just a fifth of what it was a year ago.

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Rupee

New Delhi, Feb 25 : Bank credit growth is set to bottom out but may rise 200-300 bps next fiscal while retail lending, supported by securitisation, will remain the key driver in the next fiscal.

The prolonged slowdown in bank lending may be bottoming out this fiscal, with gross credit offtake set to rise 8-9 per cent on-year in fiscal 2021, a good 200-300 basis points (bps) over the likely growth of 6 per cent this fiscal.

A gradual pick-up in economic activity, continuing demand for retail loans, and strong growth in lending by private sector banks should drive the uptick.

Recent policy moves announced in the Union Budget, and by the Reserve Bank of India (RBI) are also expected to provide the spur, Crisil Ratings said on Tuesday.

As for this fiscal, some growth momentum is expected in the fourth quarter, after a subdued three quarters — due to traditional fiscal year ending growth.

The RBI’s move to exempt banks from cash reserve ratio requirement for incremental credit to certain sectors for up to five years will also support lending.

Incremental net domestic credit this fiscal up to December 2019 is just a fifth of what it was a year ago.

Lending to the retail segment and non-banking financial companies showed good growth, while credit to corporates (ex-NBFC) and micro, small, and medium enterprises declined, Crisil said.

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Maruti Suzuki launches all new Vitara Brezza

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Maruti Suzuki Vitara Brezza

New Delhi, Feb 24 : Automobile major Maruti Suzuki India on Monday launched the all new compact SUV Vitara Brezza, which was unveiled at the recently held Auto Expo 2020.

The new vehicle has been priced in the range of Rs 7.34 lakh to Rs 11.40 lakh, the automobile major said on Monday.

According to the company, the new compact SUV offers enhanced sportiness, bolder looks, stronger stance, premium interiors and a host of new features.

The vehicle is equipped with the powerful 1.5 litre K-series BS6 petrol engine.

“The compact SUV will be offered with 5-speed manual and advanced automatic transmission with Smart Hybrid,” the company said in a statement.

In less than 4 years of its launch, Vitara Brezza has sold over 500,000 units.

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Dow Jones plunges 1,000 points over coronavirus fears

Earlier this month, Apple, the world’s most valuable company, rang alarm bells on Coronavirus impact on its sales.

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us stock

Mumbai, Feb 24 : The possibility of a coronavirus pandemic sent shock waves across global markets on Monday. Dow Jones Industrial Average lost over 800 points within minutes of its opening.

A sharp sell-off in US markets followed worries of further disruption in economic activity as coronavirus related deaths jumped sharply, particularly outside China.

The S&P 500 traded lower by 84.89 points, or 2.54 per cent, at 3,252.86 while the Nasdaq Composite dropped 287.27 points, or 3 Aper cent, to 9,289.32 at the opening bell.

Italy saw virus cases jumping exponentially from three on Friday morning to more than 150 by Sunday. Italy’s spike now marks the biggest outbreak outside of Asia.

In China, the epicentre of the outbreak, the coronavirus related deaths jumped past 2,600. The deadly virus has infected more than 77,000 people in China and was described by President Xi Jinping as the “largest public health emergency since the founding of the country”.

Earlier this month, Apple, the world’s most valuable company, rang alarm bells on Coronavirus impact on its sales.

Jaguar Land Rover CEO Ralf Speth also reportedly said that the company does not have enough parts from China to maintain its British production post two weeks.

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