Tata Sons is all set to take back control of India's national carrier, more than 50 years after ceding control to the government, latest reports said.
In terms of physical assets, the winner of Air India gets a veritable bounty — the control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, besides 900 slots at airports overseas.
In terms of physical assets, the winner of Air India gets a veritable bounty — the control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, besides 900 slots at airports overseas.
According to reports, a proposal to this effect from bureaucrats has been accepted by a ministerial panel. The bureaucrats in question — the Core Group of Secretaries on Disinvestment — had backed the Tata bid ahead of the offer made by SpiceJet's Ajay Singh.
The bids offered by Singh and Tata Group were opened in September, and were vetted by the bureaucrats' group headed by Cabinet secretary Rajiv Gauba at the fag-end of the month.
Modi government for quite some time had been seeking to offload its entire in the state-owned airline. The structure include Air India's 100 per cent shareholding in Air India Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
The stake sale process had begun in January 2020. But it had to face delays due to the pandemic.
Sale attempts were being made since 2017, but these failed to generate any interest from potential buyers. The most-recent sale bid went up in smoke when IndiGo dropped out of the race in 2018, citing its inability to return the ailing carrier to profit.
Following thorough feedback from aspiring buyers, Modi government had in October 2020 sweetened the clause relating to the transfer of Air India's debt to the new investor. The real sweetener was the flexibility to decide on the quantum of debt buyers want to absorb.
The national carrier has been in the red ever since its merger with Indian Airlines in 2007.
As per DIPAM's papers, Air India's total debt stood at Rs 60,074 crore as of March 31, 2019. Under the deal clauses, the buyer is required to absorb Rs 23,286.5 crore of that debt. The rest would go to AIAHL, a special purpose vehicle.
08/10/21 Economic Times
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