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Tata Sons winning Air India bid report 'incorrect', says Govt

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

India TV Business Desk India TV Business Desk
New Delhi Updated on: October 01, 2021 14:50 IST
air india bid
Image Source : PTI (FILE)

Tata Group wins Air India bid 

Tata Sons, the holding company of Indian multinational conglomerate Tata Group, has won the bid to take control of Air India, news agency ANI reported citing sources. However, the Department of Investment and Public Asset Management in a statement said that media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. "Media will be informed of the Government decision as and when it is taken," it said.

Reports say that the Committee of Ministers on the national carrier disinvestment headed by Home Minister Amit Shah has approved the winning bid for the national airline.

The government had last week evaluated financial bids received from Tata Group and SpiceJet founder for the acquisition of Air India. The financial bids were evaluated against an undisclosed reserve price and the bid offering the highest price above that benchmark was be accepted.

This marks the return of Air India to Tata fold after 67 years. The Tata Group founded Air India as Tata Airlines in October 1932. The government nationalised the airline in 1953.

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.

The stake sale process, which begun in January 2020, faced delays 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.

Tata Group was among the multiple entities that had put in an initial expression of interest (EoI) in December 2020 for buying the Maharaja.

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.

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.

Air India has been in losses ever since its merger with domestic 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 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.

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