Nearly seven decades after Tata Group ceded control of Air India to the government, the salt-to-software conglomerate will yet again take over the reins of the debt-laden national career. Tata’s special purpose vehicle (SPV) Tallis Pvt Limited placed the winning bid of Rs 18,000 crore (USD 2.4 billion) to gain 100% stake in Air India, the government said on October 8.
The winning bid includes taking over of 15,300 crore of debt and paying the rest in cash. This was higher than the Ajay Singh-led consortia’s bid at Rs Rs 15,100 with debt to be retained at Rs 12,835 crore and cash component of Rs 2265 crore.
A senior official of the Department of Investment and Public Asset Management (DIPAM) said said a group of ministers comprising Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Civil Aviation Minister Jyotiraditya Scindia has cleared the winning bid for Air India on October 4.
As on August 31, 2021, Air India has a total debt of _ 61,562 crore, out of that _ 15,300 will be taken over by the bidder while the remaining _ 46,262 crore will be transferred to Air India Assets Holding Limited (AIAHL),. AIAHL is a SPV formed by the government. Selling Air India, which has not made profits in 15 years, was a vital piece in the government’s ambition to privatise assets.
Soon after government’s announcement, Tata Group chairman emeritus Ratan Tata took to Twitter to express his happiness and shared an emotional note with an old image of JRD Tata.
Tata Group chairman N. Chandrasekaran hailed the acquisition as a “historic moment” and said it’s will be privilege to own Air India.
“At the Tata group, we are delighted to be declared as the winner of the bid for AIR INDIA. This is a historic moment, and it will be a rare privilege for our Group to own and operate the country’s flag bearer airline. It will be our endeavour to build a world-class airline which makes every Indian proud. On this occasion, I would like to pay tribute to J.R.D. Tata, pioneer of Indian aviation, whose memory we cherish,” said N. Chandrasekaran, Chairman, Tata Sons.
Jehangir Ratanji Dadabhoy (JRD) Tata founded the airline in 1932. It was called Tata Airlines then. In 1946, the aviation division of Tata Sons was listed as Air India and in 1948, Air India International was launched with flights to Europe.
The international service was among the first public-private partnerships in India, with the government holding 49 per cent, the Tatas keeping 25 per cent and the public owning the rest.
In 1953, Air India was nationalised.
The government is selling 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.
