Tata Sons group has won the bid for acquiring national carrier Air India. Tata Sons made a winning bid of 18,000 crore rupees for Air India. Talace Private Ltd, which is a wholly owned subsidiary Tata Sons has emerged as successful bidder for acquiring Air India beating a Consortium led by Ajay Singh whose bid was 15,100 crore rupees. Both the bidders had quoted above the reserve price of 12,906 crore rupees.
Department of Investment and Public Asset Management, DIPAM Secretary Tuhin Kanta Pandey while addressing a press conference in New Delhi said that the winning bid comprises of taking over of 15,300 crore rupees debt and paying rest by cash. He added that 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. He said, the transaction is expected to be completed by December 2021.
Mr Pandey said that an Inter- Ministerial Group comprising Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Civil Aviation Minister Jyotiraditya Scindia cleared the winning bid for Air India on 4th of October.
Mr Pandey said that the Finance Minister Nirmala Sitharaman had said in her Union Budget speech that the Governemnt of India aims to complete the Air India divestment in Financial Year 2022. He said, the competitive process has been carried out in a transparent manner.
On the issue of retaining employees of Air India, Civil Aviation Secretary Rajiv Bansal assured that no employee will be retrenched and the Tata Sons will have to retain all the employees of the national carrier for one year and in the second year if someone is to be retrenched then a VRS option has to be given.
AIR correspondent reports that the process for disinvestment of Air India and its subsidiaries commenced in June 2017 with the ‘in-principle’ approval of Cabinet Committe of Economic Affairs. The first round did not elicit any Expression of Interest. The process re-commenced on 27 January 2020.
Tata Group had earlier run Air India before it was nationalised. The Tata Group-Air India relationship went back to 1932 when legendary industrialist Jehangir Ratanji Dadabhoy had launched the national carrier. The airline soon expanded to passenger aircraft and in 1938 it started flying overseas. With Columbo being added to its list of destinations, the name of the airlines was changed to Tata Air Services and later to Tata Airlines. The legendary airlines flew support missions for the British Royal Air Force during World War II in Burma. Once the war was finished, the airline changed its name to Air India. The Central government soon took interest in Air India and bought 49 per cent stake in it. With the Air Corporations Act in 1953, the government took over the company from Tata Sons and nationalised it. Now, in view of mounting debt, the Union government once again had invited bids for strategic disinvestment of 100 per cent stake of the government in the airline last year.