New Delhi: Tata Sons today emerged as the winner of a multi-crore financial bid to take control of Air India, according to a PTI report. A panel of ministers has cleared the winning bid for the iconic national carrier. Earlier, two bidders had put in financial bids, Department of Investment and Public Asset Management (DIPAM) Secretary said. Divulging details, DIPAM Secretary stated that Tata Sons made the winning bid of Rs 18,000 crore for Air India, the PTI report says.Also Read - Air India Unions Write to Govt, Express Concern Over Cash, Leave, Medical Benefits of Employees
Air India Tata Deal: Highlights
- Tata Sons’ winning bid of Rs 18,000 crore for Air India was higher than reserve price of Rs 12,906 crore set by the central government, DIPAM Secretary stated adding that the Centre will get Rs 2,700 crore cash from Tatas for sale of its 100 per cent stake, as per a PTI report.
- Notably, Tatas’ winning bid of Rs 18,000 crore comprises taking over of Rs 15,300 crore debt and paying rest cash, DIPAM Secretary added.
- The central government has laid down certain conditions for Tata. According to DIPAM Secretary, Tatas cannot transfer Air India brand and logo for five years. These can be transferred to only Indian person after five years, PTI reported.
- Tatas will have to retain all staff of Air India for 1 year. However, the group subsequently can offer voluntary retirement scheme (VRS) in the second year, Aviation Secretary was quoted as saying by PTI.
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- Tatas will take over the national carrier they once founded. 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.
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- The central government was seeking 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.
- The stake sale process began in January 2020, faced delays due to the COVID-19 pandemic. In April 2021, the government asked potential bidders to put in financial bids.
- Tata Group was among the multiple entities that had put in an initial expression of interest (EoI) in December 2020 for buying the Maharaja.
- As per the Air India EoI floated by 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. Air India has been in losses ever since its merger with domestic operator Indian Airlines in 2007, as per a PTI report.
- The airline will give Tata Group the 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 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.