Talace, a subsidiary of Tata Sons, has won the bid for Air India and has bought the national carrier at the value of Rs. 18,000 crore. It is now a wait-and-watch situation for the industry.
With this winning bid, Tata will own 100% stake in Air India, as well as 100% in Air India Express and 50% in Air India SATS. Not only will the new owners get 141 planes and access to a network of 173 destinations with 55 international ones, they will get the brands like Air India, Indian Airlines and the Maharajah.
“Talace has quoted an enterprise value of `18,000 crore. Of this, `15,300 crore is the debt component of Air India to be taken on by the winner, and the remaining `2,700 crore will be cash paid to the government,” said DIPAM Secretary, Tuhin Kanta Pandey.
The Group of Ministers led by Home Minister Amit Shah approved the winning bidder in its meeting on October 4, 2021. The plan is to complete the transaction by December 2021, when the Government will transfer its shares and handover the airline to the new buyer.
Rajiv Bansal, Secretary, Ministry of Civil Aviation, said,“The government has addressed all concerns of the employees. The winning bidder will retain all employees for one year. In the second year, if anyone has to be removed, they will be offered VRS. They will be provided gratuity and provident fund benefits as per applicable law. Post-retirement medical benefits of those who have retired and those who will be retiring will also be taken care of by the government.”
Pandey also revealed that the government will absorb the balance debt of `46,262 crore, which will be transferred to a special purpose vehicle set up by Air India Assets Holding.
Strong opportunity for Tata Group
“Welcome back, Air India. While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group’s presence in the aviation industry.”
Ratan Tata, Chairman Emeritus of Tata Sons, said in a tweet