The Tatas have reacquired control of Air India 68 years after ceding control to the government (File)
The government will get Rs 2,700 crore in cash from the divestment of Air India, DIPAM Secretary Tuhin Kunta Pandey said Friday, as he announced that Tata Sons had won the bid to acquire the embattled national carrier.
The Tata's winning bid is for Rs 18,000 crore, for which they will get 100 per cent stake in Air India, as well as a 50 per cent stake in its ground-handling company AISATS and Air India Express.
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, Air India Assets Holding Limited (AIAHL).
Air India has a total debt of Rs 61,562 crore, the government has said.
The Tatas will take on Rs 15,300 crore of that amount, leaving Rs 46,262 crore as the remaining amount, which will go to a SPV to isolate the company from current and future financial risk.
The Tatas have reacquired Air India 68 years after they ceded control of the airline to the government. Air India began life as Tata Air Services in 1932 when it was founded by JRD Tata.
The company was nationalised in 1953. JRD Tata continued as Chairman till 1977.
Earlier this month both Tata Sons and SpiceJet chairman Ajay Singh (in his private capacity) had placed bids. Reports last month that Tata had won were played down by Union Minister Piyush Goyal, who said nothing had been finalised.
This was the second attempt by the Narendra Modi government to sell Air India.
The centre made an attempt in March 2018 but its expression of interest - to sell a 76 percent stake - had no takers over concerns regarding the airline's burgeoning debt.
Despite its precarious finances, Air India still controls more than 4,400 domestic and 1,800 international landing and parking slots at domestic airports, and 900 slots overseas.
The Tata Group also operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia's AirAsia.