Tata Sons has won the bid to acquire debt-laden state-run carrier Air India. The salt-to-software conglomerate made an offering of ₹18,000 crore to acquire 100 per cent shareholding in the airline, a senior government official said on Friday (October 8).
An SPV of Tata Sons – the holding company of the conglomerate – has emerged as a successful bidder, Tuhin Kanta Pandey, secretary to the Department of Investment and Public Asset Management (DIPAM), the Centre’s department responsible for privatisation, said.
The Centre, however, has given a rider that no Air India employee can be sacked within the first year and will be given the option of voluntary retirement scheme in the second year.
“Welcome back, Air India,” tweeted company’s former chairman Ratan Tata. The tweet was accompanied with a message where Tata thanked the Centre for opening select industries to the private sector.
Welcome back, Air India 🛬🏠 pic.twitter.com/euIREDIzkV
— Ratan N. Tata (@RNTata2000) October 8, 2021
“The Tata Group winning the bid for Air India is a great news. While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group in the aviation industry,” the message read.
Tata Sons beat SpiceJet promoter to bag Air India. The DIPAM secretary said Tata’s bid of ₹18,000 crore comprises taking over of 15,300 crore of debt and paying the rest in cash. Both bidders had quoted above the reserve price, he said adding the transaction is planned to be closed by December.
A group of ministers comprising Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Civil Aviation Minister Jyotiraditya Scindia has cleared the winning bid for Air India on October 4, the secretary said.
A fond reunion
The acquisition is reunion of the Tatas with the airlines. Jehangir Ratanji Dadabhoy (JRD) Tata founded the airline in 1932. It was called Tata Airlines then. In 1946, the aviation division of Tata Sons was listed as Air India and in 1948, Air India International was launched with flights to Europe. The international service was among the first public-private partnerships in India, with the government holding 49 per cent, the Tatas keeping 25 per cent and the public owning the rest.
In 1953, Air India was nationalised. The government is selling 100 per cent of its stake in the state-owned national airline, including Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
(With inputs from agencies)