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Steel baron Mittal in Indian Airlines bid

London-based steel baron L N Mittal is part of a group led by India's home electronics company Videocon bidding for a 26 per cent stake in domestic carrier Indian Airlines, a source close to the bidding process said.

"Mittal has now teamed-up with Videocon, and is backing that bid for Indian Airlines," the source, who did not wish to be identified, said over the weekend.

Mittal, who controls steel group Ispat International NV, had bid for 40 per cent of long-haul airline Air-India last year but withdrew ahead of a February 23 deadline to declare consortium partners.

Ispat describes itself as the world's seventh largest steel group. It is headquartered in the Netherlands.

Venugopal Dhoot, chairman of Videocon International, refused to comment on his partners in the consortium bidding for Indian Airlines.

"I am bound by a non-disclosure clause, and cannot name members of my consortium," Dhoot said.

An official for Mittal in London declined comment.

Indian Airlines and Air-India are state-owned. New Delhi plans to complete both the big ticket sell-offs this year.

The government seeks to sell 26 per cent of Indian Airlines and 40 per cent of Air-India.

Mittal was preparing to bid for Air India in partnership with Indian finance company Kotak Mahindra, with technical advice from British Airways and Qantas.

But the alliance fell through.

Other bidders

Besides the Videocon-led bid, the only other bidder in the race for Indian Airlines are the Britain-based billionaire Hinduja brothers.

Expatriate Indians are allowed to bid for both airlines.

For Air-India, the two suitors are Singapore Airlines, bidding in tandem with the Tata Group, and the Hinduja brothers.

Indian Airlines swung to a big loss in the first 10 months of 2000-2001, an internal company document showed in March. It suffered a net loss of Rs 1.45 billion from April 2000 to January 2001 compared with a Rs 550-million profit in the year earlier period.

The document said the state-run airline was expected to end the year sharply in the red, ending a three-year profit-making run.

Air-India said last month it posted a provisional net loss of Rs 285 million in the year to March 31, its lowest in six years.

This was also nearly Rs 100 million below the net loss of Rs 380 million forecast by Air-India just before close of the financial year in March and the airline said its audited results could show it back in the black.

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