NEW DELHI, OCT 8, 2021
The Cabinet Committee on Economic Affairs (CCEA) – empowered Air India Specific Alternative Mechanism (AISAM) approved the highest price bid of Talace Pvt Ltd, a wholly owned subsidiary of Tata Sons Pvt. Ltd for sale of 100% equity shareholding of Government of India in Air India along with equity shareholding of Air India in AIXL and AISATS.
Tata Sons will retake Air India – the airline it founded nearly 90 years back – as the government accepted its winning bid of Rs 18,000 crore to acquire 100 per cent of the state-run carrier.
Talace Pvt Ltd made the winning bid of Rs 2,700 crore cash and Rs 15,300 crore in debt takeover, Tuhin Kanta Pandey, Secretary in the Department of Investment and Public Asset Management, said at a briefing on Friday.
The winning bid is for Rs 18,000 crore as Enterprise Value (EV) consideration for AI (100% shares of AI along with AI’s shareholding in AIXL and AISATS). The transaction does not include non-core assets including land and building, valued at Rs 14,718 crore, which are to be transferred to GoI’s Air India Asset Holding Limited (AIAHL).
As per the terms of the transaction, Tatas cannot lay off any employee for one year and can offer a VRS in the second.
The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement following which, the conditions precedent would need to be satisfied by the successful bidder, the company and Government. It is expected that the transaction will be completed by December 2021.
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.