Tata Sons have won the bid to acquire debt-laden state-run Air India offering ₹18,000 crore for acquiring 100% shareholding, Tuhin Kanta Pandey, secretary to the Department of Investment and Public Asset Management (DIPAM) said on Friday.
DIPAM is the government department responsible for privatisation.
An SPV of Tata Sons, Talace Pvt Ltd, has emerged as successful bidder, beating SpiceJet promoter to bag Air India.
The DIPAM secretary also said Tatas’ bid of ₹18,000 crore comprises taking over of ₹15,300 crore of debt and paying the rest in cash.
Tata Sons will also acquire Air India’s 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd. However, the transaction does not include non-core assets including land and building, valued at Rs 14,718 crore, which are to be transferred to the government’s holding company AIAHL.
The deal marks the return of Air India to Tatas, completing a full circle as Air India was founded in 1932 under the name Tata Airlines by family scion and aviation enthusiast JRD Tata.
In 1946, the aviation division of Tata Sons was listed as Air India and in 1948, Air India International was launched with flights to Europe.
Air India international was among the first public-private partnerships in India, with the government holding 49 per cent, the Tatas keeping 25 per cent and the public owning the rest.
In 1953, Air India was nationalised.
Welcome back, Air India
Tata Sons chairman emeritus Ratan Tata today tweeted an old photograph of the company’s former chairman JRD Tata getting down from an Air India aircraft, minutes after Tata Sons regained control of the government airline – nearly 70 years after its nationalisation.
“At the Tata group, we are delighted to be declared as the winner of the bid for Air India. 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,” Tata Sons chairman N Chandrasekaran said in a statement today.
“It will be our endeavour to build a world-class airline which makes every Indian proud. On this occasion, I would like to pay tribute to JRD Tata, pioneer of Indian aviation, whose memory we cherish”, he added.