Tata Group wins Air India offer

0


Image source: PTI (FILE)

Tata Group wins Air India offer

Tata Sons, the holding company of Indian multinational conglomerate Tata Group, has won the bid to take control of Air India, according to media reports.

Reports indicate that the Committee of Ministers on the divestment of the national carrier headed by Interior Minister Amit Shah has approved the winning bid for the national airline.

The government evaluated last week the financial offers received from the Tata group and the founder of SpiceJet for the acquisition of Air India. Financial offers have been evaluated against an undisclosed reserve price and the offer offering the highest price above this benchmark has been accepted.

This marks Air India’s return to Tata’s downturn after 67 years. The Tata Group founded Air India as Tata Airlines in October 1932. The government nationalized the airline in 1953.

The government sells 100 percent of its stake in the state-owned national airline, including Air India’s 100 percent stake in AI Express Ltd and 50 percent in Air India SATS Airport Services Private Ltd.

The share sale process, which began in January 2020, has experienced delays due to the COVID-19 pandemic. In April 2021, the government asked potential bidders to submit financial bids. The last day for submitting financial offers was September 15.

The Tata group was one of several entities that had filed a first expression of interest (EoI) in December 2020 for the purchase of the Maharaja.

With previous attempts since 2017 not generating significant interest and after receiving comments from potential investors, the government softened in October last year the EoI clause relating to the transfer of Air India’s debt to the United States. new investor, giving bidders the flexibility to decide how much of a colossal debt they want to absorb.

According to Air India’s EoI issued by the Department of Investment and Public Asset Management (DIPAM) in January 2020, on 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 crores. The rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.

Air India has been at a loss since its merger with the national operator Indian Airlines in 2007. The airline, which was formed by the Tatas as a mail carrier in 1932, will give the successful bidder control of 4,400 seats. landing and parking national and 1,800 international. at domestic airports, as well as 900 slots at overseas airports. In addition, the bidder would obtain 100 percent from the low-cost branch of Air India Express and 50 percent from AISATS, which provides freight and ground handling services at major Indian airports.

Latest news from India


Share.

About Author

Comments are closed.