Tata Sons on Friday regained control of the government airline Air India nearly 70 years after its nationalisation. Tata Group already owns about 84% stake in AirAsia India and 51% in Vistara.
Ending its several years of struggle to privatise the financially troubled airline, the Tata Sons has emerged as the winning bidder to take over the control of Air India.
Till August 31, Air India, which serves 42 international destinations, had a total debt of Rs 61,562 crore.
The company had placed a winning bid of Rs 18,000 crore to re-acquire the 100% stakes of the airline. The government had started evaluating the bids for the debt-laden national carrier earlier last week.
To take over the ownership of the Air India, the Tata Sons will pay Rs 18,000 crore for the Maharaja, outbidding a consortium led by Spice Jet’s Ajay Singh who had bid Rs 15,100 crore. The transaction is expected to be done by the end of December this year.
Over the years, the Central government have tried selling the money guzzling airline. The govt will get Rs 2,700 crore in cash from the Air India sale. The rest is the government’s debt, which Air India will take over.
Air India first began as Tata Air Services in 1932. The airline returned to Tata after 68 years now.
The process of Air India’s sale began in July 2017 and the government has received 7 expressions of interest by December last year, the Finance Ministry’s Department of Investment and Public Asset Management (DIPAM) announced on Friday.
The DIPAM secretary 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.