Private equity funds KKR and Co. and Warburg Pincus are the latest to express interest in acquiring Air India’s businesses, according to two people directly aware of the development.

The two buyout firms have separately sought details of the proposed privatisation process of the national carrier that was cleared by the cabinet in end June, the people cited above said on condition of anonymity.

“Air India’s businesses make attractive investment opportunity for the PE funds,” said one of the two people. “However, the discussions are currently at a very early stage and will expectedly gain momentum once there is further clarity on the divestment process.”

A successful sale of Air India will hinge on whether the government writes off a part of the airline’s debt, which stood at Rs48,876.81 crore as of 31 March. The government has already injected massive funds as part of a Rs30,000 crore bailout package to keep the money-losing carrier afloat.

A potential debt write-off and access to the state-owned airline’s lucrative international routes have already drawn interest from two entities. Among them are InterGlobe Aviation Ltd, which runs the IndiGo airline, and the Tata group, which runs the Vistara and Air Asia India airlines.

IndiGo said it is interested in Air India’s international arm and low-fare division Air India Express. Mint also reported last week that the Tata group has informally sought details on Air India’s privatisation from the government.

The government has constituted a group of ministers, headed by finance minister Arun Jaitley, to explore options related to the sale of assets and a potential demerger and strategic disinvestment of three profit-making subsidiaries.

While both KKR and Warburg declined to comment, the people cited earlier said the funds were told to wait till an independent adviser is appointed to manage the sale through a bidding process.

“A proposal inviting investment banks to manage divestment is expected soon and quite a few domestic and foreign investment banks have been sounded out,” said the first person.

Mint reported last week that the group of ministers held its first meeting on 21 July, in which the department of investment and public asset management was asked to prepare a proposal on Air India’s disinvestment.

The report said that the meeting was meant to focus on two points: to put Air India’s accounts and data before the group and to explain issues such as its debt burden and the way to resolve it, and the appointment of a transaction adviser, legal adviser and valuer.

A spokesman for the civil aviation ministry had not responded to a query seeking comment at the time of going to press.

The interest shown by the two private equity funds is arguably the first by overseas investors after foreign direct investment rules in aviation were changed last year to allow them to own 100% stake in local airlines while limiting investment by foreign airlines to 49% of a domestic airline’s paid-up capital. More global funds may join the fray in the coming days once the details of assets on sale are clear, said the people cited earlier.

The last sizeable private equity investment in an Indian carrier was in 2008 when US billionaire investor Wilbur Ross invested $80 million (Rs342.4 crore) in SpiceJet Ltd, India’s second largest low-cost carrier, to buy a 30% stake.

Ross exited the airline two years later at an estimated valuation of $127 million.

Air India has about 17% share of traffic on routes linking India to international destinations and 13% of the domestic market.