Salt-to-software conglomerate Tata Sons on Friday won the bid for acquiring debt-laden state-run national service Air India offering Rs 18,000 crore for obtaining 100 per cent shareholding.
The company placed a prevailing bid of Rs 18,000 crore to re-acquire the airline more than half a century after it ceded control to the government. The authorities will get Rs 2,700 crore cash from Tatas for the sale of its 100 per cent stake.
“Talace Pvt Ltd of Tata Sons is the winning bidder at Rs 18,000 crores. The transaction is expected to close by the end of December 2021,” said Tuhin Kant Pandey, secretary, Department of Investment and Public Asset Management (DIPAM).
Welcome back, Air India 🛬🏠 pic.twitter.com/euIREDIzkV
— Ratan N. Tata (@RNTata2000) October 8, 2021
He added, “Tatas will have to retain all employees of Air India for one year however can offer voluntary retirement scheme (VRS) in second year.”
Tata Sons’ winning bid of Rs 18,000 cr for Air India used to be higher than reserve price of Rs 12,906 crore set by government.
Attaching a message and a photo, Ratan Tata tweeted “Welcome back, Air India” after winning the bid.
Terming it as a historic moment, Tata Sons chairman N. Chandrasekaran additionally issued a statement. “At the Tata group, we are delighted to be declared as the winner of the bid for Air India.
This is a historic moment, and it will be a rare privilege for our Group to own and operate the country’s flag bearer airline. It will be our endeavour to construct a world-class airline which makes each Indian proud.
On this occasion, I would like to pay tribute to JRD Tata, pioneer of Indian aviation, whose memory we cherish.”
Tata Sons beat SpiceJet promoter to bag Air India. Ajay Singh, SpiceJet’s chairman and managing director, also released a statement congratulating the Tata Group on winning the bid for Air India.
“I congratulate the Tata Group on winning the bid for Air India and want them all the success. It used to be my honour and privilege to be shortlisted for bidding for Air India. I am confident that the Tata Group will repair the glory of Air India and make all of India proud,” he said in a statement.
The statement similarly read, “I would additionally like to congratulate the Government on the successful disinvestment of Air India. They ran a obvious and flexible process and gave new impetus to India’s disinvestment program. I have been an Air India fan all my life and it’s time for the Maharaja to reclaim its position as a leading airline of the world.”
The DIPAM secretary stated Tatas’ bid of Rs 18,000 crore includes taking over 15,300 crore of debt and paying the rest in cash.
Both bidders had quoted above the reserve price, he said, including 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 had cleared the winning bid for Air India on October 4.
This marks the return of Air India to the Tatas.
Jehangir Ratanji Dadabhoy (JRD) Tata founded the airline in 1932. It used to be called Tata Airlines then. In 1946, the aviation division of Tata Sons was once listed as Air India and in 1948, Air India International used to be launched with flights to Europe.
The global service used to be 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 used to be nationalised.
The authorities is selling 100 per cent of its stake in the state-owned national airline, along with Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.