Tata Sons have emerged successful in winning the bid of India’s struggling national carrier Air India, said Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM).
The country’s largest conglomerate had submitted their final bids last month to acquire a 100 per cent stake in the flag carrier. They were up against SpiceJet promoter Ajay Singh who had bid in his individual capacity.
The stake sale includes Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
Briefing the media about the decision, Pandey said that Cabinet Committee on Economic Affairs (CCEA) had instituted Air India Specific Alternate Mechanism which has identified the winning bidder for the national airline. The Air India Specific Alternate Mechanism consists of Home Minister, Finance Minister, Commerce and Industry Minister and Civil Aviation Minister.
He added that Talace Pvt Ltd of Tata Sons emerged as the winning bidder at Rs 18,000 crore. The transaction is expected to close by the end of December 2021.
The airline’s divestment is expected to give Tata Sons control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, and 900 slots at airports overseas.
In January last year, the government had invited submission of expressions of interest (EoIs) for full stake in Air India, and made certain changes to the bid conditions over time, including allowing interested parties to bid at an enterprise value of the airline, combining the values of both debt and equity. But, soon after the government opened invited bids, the Covid-19 crisis had hit and the process had got delayed.
In April this year, the Centre had finalised the qualified interested bidders and asked them to submit a final bid.
The airline was founded by the Tata Group in 1932 and was nationalised in 1953. The Mumbai-based conglomerate has evinced interest in acquiring the airline on several past occasions.
Air India has been in losses ever since its merger with domestic operator Indian Airlines in 2007.