Tata Sons Emerges Winning Bidder For Air India At Rs 18,000 Crore

A wholly owned subsidiary of Tata Sons Pvt. Ltd. has emerged as the winning bidder for national carrier Air India.

The winning bid of Rs 18,000 crore was submitted by Tata subsidiary Talace Pvt. Ltd. A letter of intent will be issued, share-purchase agreement will be signed, said divestment secretary Tuhin Kanta Pandey.

The government wants to close the transaction by the end of December 2021.

Watch the press conference here:

The new owner will have to maintain 51% equity for next one year, said Tuhin Kanta Pandey.

"At the Tata Group, we are delighted to be declared as the winner of the bid for Air India. This is a historic moment, and it will be a rare privilege for our group to own and operate the country’s flag bearer airline," Tata Sons Chairman N Chandrasekharan said. "It will be our endeavour to build a world-class airline which makes every Indian proud. On this occasion, I would like to pay tribute to J.R.D. Tata, pioneer of Indian aviation, whose memory we cherish."

Winning bidder will retain employees for a period of one year. If someone has to be retrenched then they will be provided voluntary retirement scheme. All concerns of employees have been heard, Aviation Secretary Rajiv Bansal said.

There are a total of 12,085 employees in Air India, of which 8,084 are permanent employees and 4,001 are contractual employees, he added.

Total debt of Air India stands at Rs 61,562 crore as of August 31, DIPAM's Tuhin Kanta Pandey said.

Debt taken over by the bidder will be Rs 15,300 crore. Rs 46,262 crore remaining debt will be transferred to the SPV. Total support by the government towards the airline since FY10 has been Rs 1,10,276 crore.

Tata Sons is the winning bidder at Rs 18,000 crore, DIPAM Secretary Tuhin Kanta Pandey said.

India has approved the winning bidder for the divestment of Air India, said divestment secretary Tuhin Kanta Pandey.

Financial bids were received from two bidders on September 15, he said. The ministerial panel that approved the bid was headed by Home Minister Amit Shah.

As India gears up to sell its prized national carrier Air India, Secretaries of the Department of Investment and Public Asset Management Secretary and Civil Aviation will brief media at 4 p.m. on Friday.

India is planning to privatise the ailing carrier. The government has set a deadline for the end of the year.

Bloomberg on Oct. 1 first reported that a panel of ministers accepted a proposal from bureaucrats that recommended Tata Sons Pvt.’s bid for the airline, ahead of an offer from entrepreneur Ajay Singh.

That will bring the 'Maharaja' back to the Tata Group, more than half a century after it ceded control to the state.

India plans to divest 100% stake in the ailing national carrier. According to the plan, 15% of the total enterprise value will have to be paid upfront in cash to the government and the rest will be used to pare the airline’s debt.

Air India’s handover is a key victory for Prime Minister Narendra Modi, who has embarked on a privatisation plan to plug a widening budget deficit. Multiple governments have tried to sell the airline but those attempts were either met with political opposition or a lack of interest from potential buyers.