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

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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.

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.
  • Right now, Air India is making losses worth ₹20 crores every day.

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