Centre invites interest for Air India arm stake sale

AIATSL provides passenger and baggage handling services
The government has invited interest for 98% stake sale in Air India’s ground handling arm — Air India Air Transport Services Limited (AIATSL). The remaining 2% will be offered to the employees of the subsidiary for a stock ownership plan. The expression of interest was floated on Tuesday on behalf of Air India Asset Holding Company, the special purpose vehicle set up by the government which will house Air India’s subsidiaries, assets as well as debt. Interested players have time till March 26 to submit their bids. The ground handling company currently provides passenger and baggage handling, cabin cleaning, ramp handling and cargo handling services at 76 airports. It has 46 airlines as its customers including Air India, its subsidiary airlines. It has a market share of about 48%. The company earned a total revenue of Rs. 668 crore and profit of Rs. 122 crore in 2017-18. It has an average EBITDA margin of 19%.
Private limited companies, public limited companies, corporate, funds and AIATSL employees are eligible to buy the ground handling company, either as a sole bidder or as part of a consortium provided they have a net worth of at least Rs. 200 crore. The entity has 1,372 permanent employees and 11,790 contractual employees from Air India. According to the bid document, nearly 42% of the permanent employees will be retiring in the next five years. In 2017-2018, employees expenses accounted for 68% of the entity’s total revenue. The bid document doesn’t provide details of liabilities or severance package that the new buyer will have to offer, which will be shared at a later stage in the request for proposal document.

Source : https://www.thehindu.com/todays-paper/tp-business/centre-invites-interest-for-air-india-arm-stake-sale/article26254194.ece

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