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Air India bid: US fund ready with war chest of 'billions'

By Dev Chatterjee
December 24, 2020 10:49 IST
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For the AI bid, Interups has joined hands with a few employees of the airline, and plans to raise funds by splitting some of its infrastructure-related assets into an aviation InvIT, which will have underlying assets such as air routes, ground handling, repairs, and training etc.

US-based fund Interups says it has Rs 13,500 crore as available capital to invest in Air India (AI), and is ready to invest “billions of dollars” in the Indian aviation industry.

The US OTC listed firm has a market capitalisaton of only $28 million, and has already made a bid for several bankrupt companies in India including Lavasa Corporation, Asian Colour Coated Steel, and Reliance Naval.

 

It has not won a single company yet and lenders say they want to see how the company will raise funds for its acquisitions in India, before taking any call on its bids.

For the AI bid, Interups has joined hands with a few employees of the airline, and plans to raise funds by splitting some of its infrastructure-related assets into an aviation InvIT, which will have underlying assets such as air routes, ground handling, repairs, and training etc.

The firm holds over 27,000 retirement asset customers with over $1.8 billion under its tax advisory, and the firm is the sole advisor on these accounts.

Interups chairman Laxmi Prasad said the firm bid for AI in “national and government” interest, which will also protect employees’ interest.

On the Tatas’ bid, Prasad said they don’t see any contender as a bet to the valuations they are planning to offer for AI.

“If someone is bettering our offer and it helps the government, then I will gladly welcome it,” said he.

The firm has formed a consortium with employees of AI, who plan to hold 51 per cent stake with Interups holding the rest after the government sells its holding.

The company had even made a $50-million offer to acquire AirAsia Berhad’s (AAB) 49 per cent stake in AirAsia India, but did not get the clearance from Tata Sons, which holds the Right of First Refusal on AAB’s stake.

Now, Interups is taking on Tata Sons for the acquisition of Air India, which would require a lot of political lobbying, besides having deep pockets.

“It’s like a David-versus-Goliath fight, in which Tata Sons will win hands down — taking into account its financial strength and legacy.

"Interups will require a lot of financial power to take the Tatas head on,” said a senior banker.

As the AI sale will have political repercussions, the government will think twice before handing over the airline to any bidder, he added.

Photograph: PTI Photo

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Dev Chatterjee in Mumbai
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