In October last year, the Center sold Air India to Tata for Rs 18,000 crore.
New Delhi:
The Tata group on Thursday officially acquired Air India from the government. N Chandrasekaran, Chairman, Tata Sons said, “We are absolutely delighted to have Air India back in the Tata Group and are committed to making it a world-class airline.” Mr Chandrasekaran also met Prime Minister Narendra Modi ahead of the official handover. “The strategic disinvestment transaction of Air India concluded successfully today, in which 100 per cent shares of Air India with management control were transferred to M/s Tales Pvt Ltd. A new Board headed by the Strategic Partner takes over the charge of Air India.” Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), said.
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In October last year, the government sold Air India to Tales Pvt Ltd, a subsidiary of the Tata group’s holding company, for Rs 18,000 crore.
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After that, a letter of intent (LOI) was issued to the Tata group confirming the government’s willingness to sell its 100 per cent stake in the airline. The Center then signed a Share Purchase Agreement (SPA) for the deal.
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As a part of the deal, the Tata Group will also be handed over 50 per cent stake in Air India Express and ground handling arm Air India SATS.
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Tata had surpassed the Rs 15,100 crore offer by SpiceJet promoter Ajay Singh-led consortium and the Rs 12,906 crore reserve price set by the government for the sale of its 100 per cent stake in the loss-making carrier.
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While this will be the first privatization since 2003–04, Air India will be the third airline brand in the Tata Group stable – it has a majority stake in Vistara, a joint venture with AirAsia India and Singapore Airlines Ltd.
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Tata will not get to retain non-core assets such as Air India’s Vasant Vihar Housing Colony, Nariman Point, Air India Building in Mumbai and Air India Building in New Delhi.
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At present, Air India handles over 4,400 domestic and 1,800 international landing and parking slots at domestic airports as well as 900 slots abroad.
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Of the 141 aircraft owned by the airline, 42 are leased aircraft while the remaining 99 are owned.
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Over Rs 1.10 lakh crore has been invested in the form of cash support and loan guarantees to keep the loss-making airline afloat in the last decade. At present, Air India is incurring a loss of around Rs 20 crore per day.
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Tata founded Tata Airlines in 1932, which was later renamed Air India in 1946. The government took control of the airline in 1953, but JRD Tata remained its chairman until 1977. After 67 years, Tata will return home to Air India.
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