New Delhi: Tata Sons has won the bid for national carrier Air India, Bloomberg has reported. A panel of ministers has accepted the conglomerate’s proposal to take over the airline, the report said. An official announcement is expected in the coming days.
While SpiceJet promoter Ajay Singh had also submitted a bid for the airline, the report has confirmed that Tata Sons has won the final bid for acquiring the airline.
Tata, who founded Air India in 1932, was among the front-runners for getting the airline back. The government nationalised the airline in 1953. Tatas operate a premier full-service carrier, Vistara, in partnership with Singapore Airlines.
ALSO READ: Fuel Prices October 1: Petrol, Diesel Prices Touch Record High Due To Rise In Crude Prices
The strategic sale of Air India was approved by the Cabinet Committee on Economic Affairs in February 2019. Started in January 2020, the stake sale process got delayed several times due to the Covid-19 pandemic. In April 2021, the government asked potential bidders to put in financial bids. The last day for placing financial bids was September 15.
What does this bidding mean for Tata Sons?
The successful bidder will mark the return of Maharaja to Tata’s fold after 67 years. The government is aiming to sell 100 per cent of its stake in the state-owned national airline, including Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
With previous attempts since 2017 failing to get any significant interest and after receiving feedback from potential investors, the government in October last year sweetened the EoI clause relating to the transfer of Air India’s debt to the new investor, giving bidders flexibility to decide on the quantum of humongous debt they want to absorb.
Debt laded Air India has been in losses ever since its merger with domestic operator Indian Airlines in 2007. The government loses nearly Rs 20 crore every day to run the national carrier, which has accumulated losses of over ₹ 70,000 crore officials have said, according to Reuters.
As per the Air India EoI floated by the Department of Investment and Public Asset Management (DIPAM) in January 2020, of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore. The rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.
Tata Sons will get control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.
Besides, the successful bidder would get 100 per cent of the low-cost arm Air India Express and 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports
(With inputs from PTI)
Be First to Comment