Talace Pvt Ltd, a wholly-owned subsidiary of Tata Sons, had won the bid to buy out the government’s share in the airline earlier this month.
On Monday, the government and Tata Sons signed a share purchase agreement for Air India’s disinvestment. Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), tweeted, “Share Purchase Agreement signed today by Government with Tata Sons for strategic disinvestment of Air India.”
Talace Pvt Ltd, a wholly-owned subsidiary of Tata Sons, was the successful bidder for the government’s share of the airline earlier this month. In a press conference at the time, Pandey stated that there were seven bidders in the second round, five of them were disqualified.
“Talace Pvt Ltd of Tata Sons is the winning bidder at Rs 18,000 crore. The transaction is expected to close by the end of December 2021,” Pandey said at a press briefing, and further adding, “7 expressions of interest (EOI) were received by December 2020. Five disqualified because they didn’t meet eligibility requirements.”
According to the government, the state-owned airline’s debt of Rs 46,262 crore would be transferred to Air India Assets Holding Limited (AIAHL), while Tatas will keep 15% of the overall debt of Rs 61,562 crore. Tatas will pay the government Rs 2,700 crore in cash and would assume a Rs 15,300 crore debt.
Ratan Tata, Chairman Emeritus of Tata Sons, welcomed Air India back to the firm following the news. “The Tata group winning the bid for Air India is great news! While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata group’s presence in the aviation industry,” he said.