New Delhi: The government on Thursday handed over Air India to Tata group concluding the long-running disinvestment process for the loss-making carrier.
Along with Air India, the Tata group has also acquired its wholly-owned subsidiary Air India Express and 50% shares of ground-handling joint venture AISATS.
A new board has taken over the management of the airline.
“The formalities have been completed. Air India disinvestment transaction is closed. The shares have been transferred to Talace (wholly-owned subsidiary of Tata Sons) which is successful bidder. Consideration amount has been received. Now the new owner is Talace,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey told reporters here.
“Entire Rs 2,700 crore has been received by the government. We have transferred the shares. Entire Rs 15,300 crore debt which was to be retained that has also been accepted. So, all the processes are complete,” he further said.
“New board is meeting now. We have handed them over,” he added. Talace is a wholly-owned subsidiary of Tata Sons and had won the bid to acquire Air India for Rs 18,000 crore.
As per the terms of the bidding, it was required to make upfront payment of Rs 2,700 crore to the government and retain the debt of Rs 15,300 crore. The transaction does not include non-core assets including land and building of Air India valued at Rs 14,718 crore. Following government’s approval of the highest price bid of Talace Pvt Ltd for strategic disinvestment of Air India, the Letter of Intent (LoI) was issued to the winning bidder on 11 October 2021. The Share Purchase Agreement (SPA) was signed on 25 October, 2021.
“Thereafter, Strategic Partner (M/s Talace Pvt Ltd), Air India and the Government worked towards satisfying a set of conditions precedent defined in the SPA including approvals from anti-trust bodies, regulators, lenders, third parties, etc. These conditions have since been met to mutual satisfaction,” said a government statement.
After the transaction concluded today, Tata Sons Chairman N Chandrasekaran said that he is happy to have Air India as part of the group. “We are very happy to have Air India back to the Tata group. We look forward to working with everyone,” Chandrasekaran told reporters at Airlines House where the new board took over. Ahead of the handover formalities, Chandrasekaran met Prime Minister Narendra Modi.
The Prime Minister’s Office (PMO) tweeted a picture of Modi and Tata Sons Chairman talking to each other in an outdoor setting on a bright sunny day.