Lagatar24 Desk
New Delhi, Oct.8: Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM) has said that Tata Sons has emerged as the top bidder for the takeover of debt-ridden state-run airline Air India for Rs 18,000 crore.
On October 4, a committee of ministers led by Home Minister Amit Shah authorised the bid, according to Pandey.
Financial bids from the salt-to-software conglomerate and SpiceJet promoter Ajay Singh were opened a few days ago and assessed by the Cabinet Secretary’s Core Group of Secretaries on Disinvestment. The bids were evaluated against the reserve price, and Tata Sons was found to be the top bidder.
Tatas will now take over the national carrier they once founded.
Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, and Civil Aviation Minister Jyotiraditya Scindia are the other members of the Air India Specific Alternative Mechanism (AISAM) panel.
The government wants to sell its entire investment in the state-owned national carrier, including Air India’s 100% stake in AI Express Ltd and 50% stake in Air India SATS Airport Services Private Ltd.
Due to the Covid-19 pandemic, the share sale process, which began in January 2020, was delayed. The government requested financial bids from possible bidders in April 2021. The deadline for submitting financial bids was September 15.
After failing to attract significant interest in previous attempts since 2017, and after receiving feedback from potential investors, the government sweetened the EoI clause relating to the transfer of Air India’s debt to the new investor in October last year, allowing bidders to choose the amount of humongous debt they want to absorb.
According to the Air India EoI published by DIPAM in January 2020, the buyer would be required to absorb Rs 23,286.5 crore of the airline’s total debt of Rs 60,074 crore as of March 31, 2019.
The balance will go to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle. Since its merger with domestic carrier Indian Airlines in 2007, Air India has been losing money.
The airline will hand up 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at international airports, to the winning bidder.
In addition, the winning bidder will receive 100% of Air India Express’s low-cost arm and 50% of AISATS, which provides cargo and ground handling services at major Indian airports.
