SpiceJet Chairman and Managing Director Ajay Singh, along with two US based funds, is keen to bid $1 billion through a Special Purpose Vehicle (SPV) in the beleaguered Air India, a report in The Economic Times said.
Citing people aware of the matter, the publication said that the SpiceJet promoter will raise $300 million by offloading his stake in SpiceJet’s cargo unit through the offer for sale route once the unit is listed. Singh has nearly 60 percent stake in SpiceJet however about one-third of it is encumbered.
Singh is expected to maintain a 26 percent stake in the SPV. The remaining $700 million will be contributed by the two based funds. The report added that these plans are “fluid” and the final plans may be “tweaked.”
Reportedly, the bidders will assign a separate value to the government's stake in Air India and the amount of debt they are willing to absorb while placing an enterprise bid. Bidders may seek a haircut on the amount of debt.
Moneycontrol could not independently verify the report.
Debt-laden Air India has been cash-strapped, and the government has invited bids for 100 percent of its equity. The airline has a total debt of Rs 37,000 crore. The government earlier said it had received ‘multiple expressions of interest’ and the deadline for submission of financial bids has been set for August third week. Tata Group has also shown interest in the bid.
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