Liquor king Vijay Mallya plans bid for Air-India

Liquor king Vijay Mallya plans bid for Air-India
DEV CHATTERJEE

MUMBAI, OCT 14: From horse racing to the race of buying an airline, liquor baron, Vijaya Mallya wants to be the next Richard Branson of India. The Chairman of Rs 3,500 crore, UB group, Mallya has now set his eyes on international carrier Air-India which has been put on the government's privatisation list.

Mallya, who lost the race to become a Rajya Sabha member in the last elections, is also looking for an ally who can support him in the bid which could cost him at least Rs 2,000 crore. Mallya, known for his flamboyance and expensive parties, already has a profit-making small airline, UB Air which has three choppers which are given on lease and a private jet for transporting him around the world.

Mallya's biggest asset in Air-India bid would be his soft-spoken Vice Chairman S R Gupte who retired as the Chairman and Managing Director of Air-India after 23 years of service in the airline and knows every aspect of the airline business. ``We will certainly bid for Air-India but we have not taken a decision on domestic carrier, Indian Airlines,'' said a top UB official.

The Department of Disinvestment has specified a net worth of Rs 1,000 crore for making a bid for either Air-India and Indian Airlines -- a criteria not yet met by Mallya's flagship company, UB. Hence, the liquor firm is looking out for a foreign partner who will pick up 26 per cent of the stake while it will pick up 14 per cent stake in Air-India.

By throwing his hat into the ring, Mallya is taking on the Big Boys of the game which includes the Tatas, the Ambanis of the Reliance group and tobacco major ITC. ITC chairman, Y C Deveshwar headed Air-India for four years and sees a synergy between his hotel chain, the Welcome group, and Air India. As compared to these cash rich companies, Mallya has his sky-high ambition to his side and, of course, global contacts.

Top UB officials, led by Gupte, have already started talking to various unions and employees of the airline to get their support and views on the bid. The group is also planning to rope in Indian Pilots Guild (IPG) to join hands with them to take over the airline which is going through one of its worst phases due to lack of professional management and daily interference from the civil aviation ministry.

The government of India plans to disinvest 60 per cent of its current equity holding in Air India by the sale of 40 per cent of its equity holding to a strategic partner, up to 10 per cent to employees and the balance to financial institutions and/or to the stock markets. If all goes well, the airline would be disinvested by the end of current fiscal though many lobbies are already working overtime to derail the entire disinvestment process.