Air India invites bids from law firms to evaluate labor issues
As Air India prepares for it disinvestment in three of its entities—Air India Ltd., Air India Express Ltd. and Air India SATS Airport Services Pvt. Ltd. (AISATS), it invites bids from law firms to assess labor issues, possible liabilities arising out of litigation and group companies’ contracts with various business partners.
Given that the national carrier’s net debt has swelled from Rs. 55,000 crore at the end of March 2018 to Rs. 58,351.93 crore at the end of March 2019, it looks to privatize by November-end. And the due diligence by a law firm will provide better clarity to potential investors about the airline. The law firm will look into the existing arrangements with employees, employee benefits and labour disputes. They will also assess Air India group’s contracts with business partners valued above Rs. 50 crore, including aircraft lease and fuel supply arrangements.
To assess these labor and other issues, Air India is looking for law firms with experience in mergers and acquisitions.
The due diligence process in such cases helps understand synergies and potential scalability of the business. It is a positive step that Air India has taken to assess all the issues during the preparation phase.
With government’s keen interest in completing the divestment of its stake in the national carrier this financial year as it could help it meet the Rs 1.05 Tn divestment target for the fiscal, the process might move swiftly.
Air India has been preparing for disinvestment for some months now. In fact, many jobs and employees have also been impacted during this period of time. In July, Air India had to put a freeze on large-scale promotion and appointments.
While the officials work on giving final shape to the document inviting expressions of interest from investors for the stake sale, the future of 10,000 permanent employees of Air India is shrouded with uncertainty.
Image Credits: Weekly Voice