Interups, which is backed by non-resident Indians (NRIs), has withdrawn its Expression of Interest for Air India (AI, Mumbai Int'l), afraid that it could be disqualified on formal grounds, the Times of India has reported.

Although the New York-based fund did not submit a binding offer by the December 29 deadline preferring, it will continue its support for that filed by a group of 209 Air India employees.

"We are aligned with the employees and terms remain the same - we completely fund the transaction with employees gaining 51% and we retaining 49%," the fund's chairman, Laxmi Prasad, said.

In their EOI, and their subsequent offer, the group of employees disclosed that they were backed by Interups. The fund initially submitted a separate EOI, in which it was identified as the lead investor but also disclosed that employees would become the majority owners of the carrier. The two EOIs were therefore essentially the same.

"We are offered an opinion that filing a separate bid with same affiliation may disqualify the interested bidder and this legal fallacy will leave only one potential bidder. Under no circumstances we would wish this happening," Prasad said.

The group of 209 employees is led by Commercial Director Meenakshi Mallik.

The list of all shortlisted bidders is due to be made public on January 5, 2021. So far, Tata Sons is known to have also submitted a bid. There were reportedly more EOIs but the names of the interested parties have yet to surface.