October 8, 2021 09:30 PM
The Centre will sell national carrier Air India to Tata Sons for Rs 18,000 crore, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said. This would put an end to the government’s prolonged attempt to sell and turnaround the airline.
The sale would be at an enterprise value of Rs 18,000 crore, out of which Rs 15,300 crore would be the debt retained by the winning bidder. Tata Sons will pay Rs 2,700 crore in cash.
The second bidder, consortium led by SpiceJet chairman Ajay Singh, placed a bid of Rs 15,100 crore, out of which Rs 12,835 crore would be the debt to be retained, and Rs 2,265 crore would have been the payment in cash.
Air India’s debt of Rs 46,262 crore would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle set up to transfer Air India’s debt. The transaction will not include non-core assets including land and building valued at Rs 14,718 crore, which will be transferred to AIAHL.
Reserve price for the airline was set by the government at Rs 12,906 crore, Pandey said.
Winning bidder will retain all employees for one year, Aviation Secretary Rajiv Bansal said. Starting second year, if employees are retrenched, they will be offered a voluntary retirement scheme. Air India has 12,085 employees.
The Air India Specific Alternative Mechanism (AISAM), headed by Home Minister Amit Shah has cleared the proposal to sell the airline to Tata Sons. AISAM has the finance minister, commerce minister and aviation minister as members. Tata Sons and Ajay Singh, in his personal capacity, were the only toe entities in fray to buy the beleaguered airline.
The government is 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 Pvt Ltd.
The government is targeting completion of sale of Air India by December-end. The sale will need the approval from the Competition Commission of India (CCI).