Salt-to-software conglomerate Tatas have won the bid to acquire debt-laden state-run Air India offering Rs 18,000 crore for acquiring 100 per cent shareholding, a senior government official said on 8 October.
As published by Sirf News previously, it was indeed a concern for protocol that the union government had previously denied that the Tatas had won the Air India bid, as it was premature to announce the auction result. Officials in the civil aviation ministry said it was indeed a fact even then that Tata Sons had got the deal in the bidding.
An SPV of Tata Sons the holding company of conglomerate has emerged as successful bidder, Tuhin Kanta Pandey, secretary to the Department of Investment and Public Asset Management (DIPAM) the government department responsible for privatisation – said.
Tata Sons beat SpiceJet promoter to bag Air India. The DIPAM secretary said Tatas’ bid of Rs 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.
He said 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 4 October.
This marks the return of Air India to the Tatas. 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%, the Tatas keeping 25% and the public owning the rest. In 1953, Air India was nationalised.
The government is selling 100% of its stake in the state-owned national airline, including Air India’s 100% shareholding in AI Express Ltd and 50% in Air India SATS Airport Services Private Ltd.
Tata Group’s Chairman Ratan Tata shared a picture of his father and founder of Air India, JRD Tata, after his company won the bid for the national air carrier on 8 October.