DIPAM secretary Tuhin Kunta Pandey on Friday said the government will get Rs 2,700 crore in cash from Air India’s disinvestment, as he announced that Tata Sons has won the bid to acquire the troubled national carrier.
Tata’s winning bid is worth Rs 18,000 crore, for which he will get a 100 per cent stake in Air India, along with a 50 per cent stake in its ground-handling company AISATS and Air India Express.
The transaction does not include non-core assets including land and building, valued at Rs 14,718 crore, to be transferred to the government’s holding company, Air India Assets Holding Limited (AIAHL).
The government has said that Air India has a total debt of Rs 61,562 crore.
Tata will take Rs 15,300 crore of that amount, leaving Rs 46,262 crore as the balance, which will go to an SPV to isolate the company from current and future financial risk.
Tata has regained Air India, 68 years after handing over control of the airline to the government. Air India started life as Tata Air Services in 1932 when it was founded by JRD Tata.
The company was nationalized in 1953. JRD Tata remained the chairman till 1977.
Earlier this month, both Tata Sons and SpiceJet chairman Ajay Singh (in his private capacity) had bid. Reports of Tata’s victory last month were downplayed by Union Minister Piyush Goyal, who said nothing has been finalised.
This was the second attempt by the Narendra Modi government to sell Air India.
The Center made an effort in March 2018, but its expression of interest – to sell a 76 per cent stake – went unnoticed on concerns about the airline’s mounting debt.
Despite its precarious finances, Air India still controls over 4,400 domestic and 1,800 international landing and parking slots at domestic airports and 900 slots abroad.
The Tata Group also operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia’s AirAsia.