Friday, October 11, 2019

Air India divestment: Tata Sons back at the drawing board, may place bid soon

Mumbai: Tata Sons wants a bite of legacy, a dash of its own aviation history and a whole lot of sky under its wings.

After going back and forth for a bit, the salt-to-software conglomerate is finally readying to bid for Air India, India’s flag carrier, and is believed to have started initial discussions internally for placing an offer.

The move comes ahead of a crucial meeting to decide on the airline’s privatisation plans, probably next week. A Group of Ministers (GoM), headed by Home Minister Amit Shah, has to take a final call.
“The Tatas were aviation pioneers and, for the group, the country’s aviation history is linked to its own. Further, with the company holding a stake in two carriers already, Air India will, if acquired, propel Tata Sons to the status of an aviation major,” a source close to the development told BusinessLine.
While the plan to bid for Air India is yet to be tabled before the Tata Sons board, the company has already held a couple of discussions on a potential deal. A decision will be taken only after seeing the contours of the final divestment papers, even though the group is looking at bringing in external agencies for due diligence, another source said.
When contacted, a Tata Sons spokesperson declined to comment, terming the bidding plans as speculation.
In India, Air India holds the highest number of slots, routes and real estate, which makes it a prize catch for any bidder. However, the possible deterrent is the airline’s debt, which is among the highest, at ?58,000 crore, with an annual outgo of more than ?4,000 crore to service it. The debt-laden airline has been given a ?30,000-crore bailout package by the government.
11/10/19 Rajesh Kurup/Business Line

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