Amidst anticipation of likely handover by weekend, the government has announced that national carrier Air India has been officially handed over to the TATA Group of Companies with the strategic disinvestment process concluding on Thursday afternoon it received INR 2,700 crore Talace Pvt Ltd. The Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance announcing the development said that 100 per cent shares of Air India are now transferred to Talace, a wholly-owned subsidiary of TATA Sons.
With this, Talace also gets full management control as the new board of Air India, led by the strategic partner takes charge of the airline. The ailing, debtridden carrier has received INR 1.10 lakh crore by way of cash support and loan guarantees by the government to keep it afloat.
TATAs on October 8, 2021 had won the bid to acquire the national carrier with the winning bid of INR 18,000 crore - out of which INR 15,300 crore are for Air India's existing debt and INR 2,700 crore to be paid as cash to the government. On October 11, 2021, a Letter of Intent (LoI) was issued to the Tata Group confirming the government's willingness to sell its 100 per cent stake in the airline. On October 25, the Centre signed the share purchase agreement for the deal.
With the acquisition process now complete, the Tata Group has got access to a fleet of 117 wide-body and narrow-body aircraft, and 24 narrow-body aircraft of Air India Express. Besides, it will get control of 4,400 domestic and 1,800 international landing, and parking slots at domestic airports. While this is Centre's first privatisation since 2003-04, Air India has now got three airlines in its kitty, with majority share in Air India India and a joint venture with Singapore Airlines for another full-service carrier Vistara.
Out of the total debt of Air India, a majority portion has been transferred to a special purpose vehicle, AIAHL, which will also manage all the land and buildings belonging to the airline, which are not part of the deal with TATAs. The airline started suffering heavy losses every year, close to INR 20 crore a day, post its merger with Indian Airlines in 2007-08.
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