Government says ‘Tata’ to Air India
Tata sons has won the bid over national carrier, Air India on Friday. The salt-to-software conglomerate placed a winning bid of ₹ 18,000 crore re-acquire the airline more than half a century after it ceded control to the government. Apart from 100 per cent stake in Air India and its low-cost arm, Air India Express, the winning bid also includes a 50 per cent stake in ground-handling company Air India SATS Airport Services Private Limited (AISATS).
Mumbai: Tata sons has won the bid over national carrier, Air India on Friday. The salt-to-software conglomerate placed a winning bid of Rs. 18,000 crore re-acquire the airline more than half a century after it ceded control to the government. Apart from 100 per cent stake in Air India and its low-cost arm, Air India Express, the winning bid also includes a 50 per cent stake in ground-handling company Air India SATS Airport Services Private Limited (AISATS).
Welcome back, Air India
pic.twitter.com/euIREDIzkV
— Ratan N. Tata (@RNTata2000) October 8, 2021
As on August 31, 2021, Air India has a total debt of Rs 61,562 crore, out of that Rs 15,300 will be taken over by the bidder, Mr Pandey stated. So, Rs 46,262 crore will be transferred to Air India Assets Holding Limited (AIAHL), he added. AIAHL is a SPV formed by the government.
Former Air India director Jitender Bhargava, in an interview with Bloomberg on Wednesday said that the Tata Group has the funds and reserves to revive it.
“Tatas have been very, very passionate about Air India,” Bhargava said. “J.R.D. Tata on record has said that this is his only creation, rest of the Tata companies came to him and he was only managing them. So there was a lot of passion, lot of emotional connection between Tatas and Air India, and that has made them bid for it,” he added.
The investment holding company Tata Sons, which possesses a major stake in AirAsia India had earlier this month submitted a bid for the Air India. While Spice Jet Limited owner Ajay Singh too has joined the race. A recommendation is likely to roll this week as to who will be the victor in the race.
The flag carrier airline of India was established in the year 1932 by the philanthropist, aviator, and industrialist J R D Tata. The Air India airline was even known as Tata Airlines. Entrepreneur JRD Tata was the country’s first licensed pilot.
The proposed handover is a key victory for Prime Minister Narendra Modi, who has embarked on a bold privatization plan to plug a widening budget deficit. It also puts an end to a decades-long struggle to offload the money-losing flag carrier. Multiple governments have tried to sell the airline — which began life as Tata Airlines in 1932 — but those attempts were either met with political opposition or a lack of interest from potential buyers.
Tata has taken over Air India again after 68 years.
