Tatas gets loan commitment from SBI-led consortium for Air India
New Delhi Jan 27 PTI A consortium of lenders led by State Bank of India SBI has agreed to provide loans to Tata Group for the smooth operations of loss-making Air India Tata Group which won the bid to acquire the national carrier along with Air India Express and 50 per cent stake in AISATS in October last year is expected to formally takeover the airline on Thursday Sources said the SBI-led consortium has agreed to grant both term loans and working capital loans depending on the airlines requirements All large lenders including Punjab National Bank Bank of Baroda and Union Bank of India are part of the consortium they added Talace Private Limited — a subsidiary of the Tata Groups holding company Tata Sons — on October 8 2021 won the bid to acquire debt-ridden Air India A unit of the holding company of the salt-to-software conglomerate had offered Rs 18000 crore as part of its winning bid — Rs 15300 crore for Air Indias existing debt and Rs 2700 crore to be paid as cash to the government On October 11 2021 a Letter of Intent LoI was issued to the Tata Group confirming the governments willingness to sell its 100 per cent stake in the airline On October 25 the Centre signed the share purchase agreement for the deal The term loans to Talace will help in retiring the high cost borrowings of Air India the sources said The deal with the government does not include land and buildings As per the agreement Tata Group will retain all the employees of Air India at least for a year With the acquisition Tata Group will have access to a fleet of 117 wide-body and narrow-body aircraft and 24 narrow-body aircraft of Air India Express Besides it will get control of 4400 domestic and 1800 international landing and parking slots at domestic airports Tata Group had surpassed the Rs 15100 crore-offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12906 crore set by the government for the sale of its 100 per cent stake in the loss-making carrier While this will be the Centres first privatisation since 2003-04 Air India will be the third airline brand in the Tatas stable as it holds a majority interest in AirAsia India and Vistara a joint venture with Singapore Airlines Ltd As of August 31 Air India had a total debt of Rs 61562 crore Around 75 per cent of this debt or Rs 46262 crore will be transferred to a special purpose vehicle AIAHL before handing over the loss-making airline to Tata Group Air India started suffering losses every year since its merger with Indian Airlines in 2007-08 A Turnaround Plan TAP and a Financial Restructuring Plan FRP were approved for Air India by the previous UPA regime in 2012 However the TAP did not work out as expected and Air India continued to reel under losses Over the last decade more than Rs 110 lakh crore has been infused by way of cash support and loan guarantees into Air India to keep it afloat PTI DP ANZ RAM
New Delhi Jan 27 PTI A consortium of lenders led by State Bank of India SBI has agreed to provide loans to Tata Group for the smooth operations of loss-making Air India Tata Group which won the bid to acquire the national carrier along with Air India Express and 50 per cent stake in AISATS in October last year is expected to formally takeover the airline on Thursday Sources said the SBI-led consortium has agreed to grant both term loans and working capital loans depending on the airlines requirements All large lenders including Punjab National Bank Bank of Baroda and Union Bank of India are part of the consortium they added Talace Private Limited — a subsidiary of the Tata Groups holding company Tata Sons — on October 8 2021 won the bid to acquire debt-ridden Air India A unit of the holding company of the salt-to-software conglomerate had offered Rs 18000 crore as part of its winning bid — Rs 15300 crore for Air Indias existing debt and Rs 2700 crore to be paid as cash to the government On October 11 2021 a Letter of Intent LoI was issued to the Tata Group confirming the governments willingness to sell its 100 per cent stake in the airline On October 25 the Centre signed the share purchase agreement for the deal The term loans to Talace will help in retiring the high cost borrowings of Air India the sources said The deal with the government does not include land and buildings As per the agreement Tata Group will retain all the employees of Air India at least for a year With the acquisition Tata Group will have access to a fleet of 117 wide-body and narrow-body aircraft and 24 narrow-body aircraft of Air India Express Besides it will get control of 4400 domestic and 1800 international landing and parking slots at domestic airports Tata Group had surpassed the Rs 15100 crore-offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12906 crore set by the government for the sale of its 100 per cent stake in the loss-making carrier While this will be the Centres first privatisation since 2003-04 Air India will be the third airline brand in the Tatas stable as it holds a majority interest in AirAsia India and Vistara a joint venture with Singapore Airlines Ltd As of August 31 Air India had a total debt of Rs 61562 crore Around 75 per cent of this debt or Rs 46262 crore will be transferred to a special purpose vehicle AIAHL before handing over the loss-making airline to Tata Group Air India started suffering losses every year since its merger with Indian Airlines in 2007-08 A Turnaround Plan TAP and a Financial Restructuring Plan FRP were approved for Air India by the previous UPA regime in 2012 However the TAP did not work out as expected and Air India continued to reel under losses Over the last decade more than Rs 110 lakh crore has been infused by way of cash support and loan guarantees into Air India to keep it afloat PTI DP ANZ RAM
