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Tata Sons Wins Bid for Rs 180 Billion

by Bithika Mohanty
Tata Sons Wins Bid for Rs 180 Billion

The Centre on Friday declared the offer by Tata Sons as the winning bid for debt-laden national carrier Air India, acquiring 100 percent shareholding. Tuhin Kanta Pandey, secretary to the Department of Investment and Public Asset Management (DIPAM), said, “We received two financial bids on September 15. The panel of ministers cleared the winning bid. Tata is the winning bid.” This is Air India’s return to its founders after a gap of 68 years.

“Tata presented a winning bid of Rs 18,000 crores,” Pandey said, adding that a letter of intent will be sent to the successful bidder soon. “The transaction is expected to close by end of December 2021,” he said. The DIPAM secretary said SPV of Tata Sons – a holding company of the conglomerate – submitted a bid of Rs 18,000 crore which comprises taking over Rs 15,300 crore of debt and paying the rest in cash.

The government has put in Rs 54,584 crores since 2009-10 as cash support and Rs 55,692 crores as guarantee support for Air India, which is a total of Rs 1,10,276 crores, Pandey said, adding that the winning bidder (Tata Sons) will retain all employees for the period of one year. “In the second year, if they aren’t retained, they will be offered VRS by the winning bidders,” he said.

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 has cleared the winning bid for Air India on October 4.

Faced with mounting debt, the Union government had invited bids for strategic disinvestment of 100 percent stake of the government of India in the airline in 2020. It also included Air India’s 100 percent shareholding in AI Express Ltd and 50 percent in Air India SATS Airport Services Private Ltd. Four bidders expressed their interest, but only Spicejet CEO Ajay Singh and Tata Sons finally remained at the forefront.

Chairman of Tata Sons, N Chandrasekaran hailed the winning bid and said “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’ll be our endeavor to build a world-class airline that makes every Indian proud.”

Chairman and Managing Director of SpiceJet, Ajay Singh in a statement congratulated Tata Group and said it was an honor to be shortlisted for the bidding. “I congratulate the Tata Group on winning the bid for Air India and wish them all the success. It was my honor and privilege to be shortlisted for bidding for Air India. I am confident that the Tata Group will restore the glory of Air India and make all of India proud. I would also like to congratulate the Government on the successful disinvestment of Air India. They ran a transparent 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.”

Tata Sons was earlier reported to take charge of the national carrier and its humongous fleet by the year-end, according to Bloomberg. News of Tata taking over the Maharaja had been termed as ‘Ghar Wapasi’ as Tata Group-Air India relationship dates back to 1932 when legendary industrialist and India’s first commercially licensed pilot Jehangir Ratanji Dadabhoy (JRD) had launched the national carrier. Tata Air Services which later became Tata Airlines is part of India’s rich history in aviation and included support missions for the British Royal Air Force during World War II in Burma.

After the war ended, the airline changed its name to the now-iconic Air India in 1946, and in 1948, Air India International was launched with flights to Europe. Then Union government in October 1947 bought a 49 percent stake in Air India. With Air Corporations Act in 1953, the government took over the company from Tata Sons and nationalized it.

https://www.news18.com/news/india/tata-sons-wins-air-india-disinvestment-sale-4300574.html

https://rtdjournal.com/bhuj-the-pride-of-india-trailer-ajay-devgn-sanjay-dutts-film-throws-bombs-and-dialogues-with-fierce-over-again/

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