Jan. 27—NEW DELHI — The Centre on Thursday concluded the divestment of national carrier Air India, handing over the airline to Tata Sons.
"The strategic disinvestment transaction of Air India successfully concluded today with transfer of 100% shares of Air India to M/s Talace Pvt Ltd along with management control," Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (DIPAM), said in a post on Twitter.
"A new Board, led by the strategic partner, takes charge of Air India," he added.
Meanwhile, the Tata Group in a statement said that it is taking over the control and management of the airline from Thursday.
"The transaction covers three entities — Air India, Air India Express and AI SATS. Air India is India's flag carrier and premier full-service airline. Air India Express is a low-cost carrier. AI SATS provides a comprehensive suite of ground handling and cargo handling services," it added.
In the statement, N. Chandrasekaran, Chairman of Tata Sons Pvt. Ltd. said that the Tata Group is excited to have Air India back and is committed to making this a world-class airline.
"I warmly welcome all the employees of Air India, to our Group, and look forward to working together," he added.
After a competitive bidding process, the government had in October sold Air India to Talace Private Ltd., a subsidiary of the Tata group's holding company, for INR18,000 crore. Tatas had beat the INR15,100 crore offer by a consortium led by SpiceJet promoter Ajay Singh.
Tata Sons, through its wholly-owned unit Talace Pvt. Ltd., had submitted the winning bid of INR18,000 crore as the enterprise value of Air India against a reserve price of INR12,906 crore.
Following the announcement of the winning bidder, the government had on 11 October issued a letter of intent (LoI) to the group.
Finance ministry said in a statement that the Air India strategic disinvestment transaction was completed with government receiving a consideration of INR2,700 crore from Talace Pvt Ltd, a wholly owned subsidiary of Tata Sons Pvt Ltd, retaining debt of INR15,300 crore in Air India and low-cost airline Air India Express Limited (AIXL) and transferring 100% shares of Air India and AIXL, and 50% shares of Air India SATS to the strategic partner.
The ministry added that the following the highest price bid of Talace Pvt Ltd for strategic disinvestment of Air India, the letter of intent was issued to the winning bidder on 11 October 2021, following which the Share Purchase Agreement (SPA) was signed on 25 October, 2021.
"Thereafter, Strategic Partner ( M/s Talace Pvt Ltd), Air India and the Government worked towards satisfying a set of conditions precedent defined in the SPA including approvals from anti-trust bodies, regulators, lenders, third parties, etc. These conditions have since been met to mutual satisfaction," the government said.
Upon the completion of the transaction, the Tatas have now been given full control of Air India and its low-cost unit Air India Express, as well as a 50% stake in ground handling company Air India SATS Airport Services Pvt. Ltd (AISATS).
"Best wishes to the new owners. I am confident that the airline will bloom under their wings, and pave the way for a thriving & robust civil aviation industry in India," civil aviation minister Jyotiraditya Scindia said on Twitter.
The Tata Group had founded Air India as Tata Airlines in October 1932. The government nationalised the airline in 1953.
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