Air India Sale: Govt Approves Winning Bid of Tata Sons At ₹18000 Crore

The Govt of India on Friday announced that Tata Sons has emerged as the successful bidder for the national carrier Air India.

The Govt has approves the winning bid of M/s Tata Sons’ SPV (M/s Talace Pvt Ltd) for Air India disinvestment at an enterprise value of ₹18000 crores. The announcement made in a Press Conference by Secretary DIPAM Tuhin Kanta Pandey and Secretary Civil Aviation Rajiv Bansal.

Government approves the winning bid of M/s Tata Sons’ SPV (M/s Talace Pvt Ltd) for @airindiain disinvestment at an enterprise value of ₹18000 crore

The bid by the consortium led by Ajay Singh was ₹15,100 crore – @SecyDIPAM #AirIndia pic.twitter.com/E4sivPQfvs
— PIB India (@PIB_India) October 8, 2021

Air India Sale – Highlights of The Press Conference

Seven EOIs were received in December 2020, five were disqualified as did not meet PIM requirements.

In the second stage, financial bids received were received on Sept 15, 2021, from both qualified bidders in a sealed cover, said Secretary DIPAM Tuhin Kanta Pandey

In the opening remarks and presentation by DIPAM, Tuhin Kanta Pandey said: “The FM had said in her Budget speech that the Govt of India aims to complete the Air India divestment in FY22. The competitive process has been carried out in a transparent manner.”

He added: “Bidders had to quote min 15% of enterprise value for cash consideration. Bidders were to quote max 85% of quoted enterprise value for retained debt.”

Tuhin Kanta Pandey said: “Over 200 queries asked seeking clarifications, revisions to share purchase agreement.”

He added: “We are not negotiating any terms and conditions after receiving financial bid. The reserve price was set before opening sealed financial bids.”

“Panel of ministers approved the price bid in October 4 meeting. Both bidders quoted well over the reserve price.”

“The Tata Group quoted enterprise value ₹18,000 crore.”

Air India’s combined debt as of August 2021 is ₹61,562 crore. The debt to be taken over by the bidder was ₹15,300 crore.

This means the government will be left with ₹46,262 crore of Air India’s debt after the privatization process is complete. This debt will remain with Air India asset holding company.

“After one year the Tata Group will have the option to offer voluntary retirement scheme to the employees,” Civil Aviation Secretary Rajiv Bansal said.