New Delhi, PTI. The government has issued a letter of intent (LOI) to sell its 100% stake in Air India to the Tata group for Rs 18,000 crore. Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, said Tata will now have to accept the LOI, after which the share purchase agreement will be signed. He said that normally the LOI has to be accepted in 14 days. After the signing of the Sale Purchase Agreement (SPA), the process of handing over to the company will begin. Along with the letter of acceptance by Tata, they will have to pay a security payment of 1.5 per cent of the Enterprise Value (EV), which is around Rs 270 crore. Under the deal, Tata has acquired 100 per cent stake in Air India Express and 50 per cent stake in ground handling company Air India SATS.
Acquisition process expected to be completed in next few months: Tata Sons
Tata Sons, the holding company of the Tata group, said on Monday that it expects to complete the process of acquisition of Air India in the next few months. According to sources, a pre-scheduled meeting of the company’s board is to be held on Tuesday, in which the acquisition of the national airline can be discussed. However, it is too early to discuss the future of the airline with the board. When contacted, a company spokesperson said, “We look forward to completing the acquisition process in the next few months.” Only after that we will be able to tell anything further.
However, he declined to comment when asked where the funding for the acquisition would come from and how the group would run the three airlines Vistara, AirAsia and Air India.
Outstanding bill of Rs 16 thousand crore will go to the government’s account
Before handing over Air India to the Tata group, the government will transfer its fuel bills and other dues of suppliers to a special purpose vehicle (SPV) of around Rs 16,000 crore. A senior official gave this information. Air India Assets Holding Limited (AIAHL), which handles non-core assets of Air India such as land and buildings, will also account for 75 per cent of the airline’s debt, which the Tata group is not taking responsibility for.
Government has political will to implement reforms: CII
The Confederation of Indian Industry (CII) on Monday said the privatization of Air India sends a clear message to the market and global investors that the government has the political will to implement reforms. The industry body said that this is the right time to expedite the efforts of privatization and disinvestment of banking sector of the two public sector banks. CII Director General Chandrajit Banerjee said the sale of Air India after several attempts would give a new impetus to the ambitious plan of disinvestment and privatization of public sector enterprises.
Passengers benefited from airlines associated with Gulf countries
Willie Walsh, Director General, International Air Transport Association (IATA), a global airline organization, has said that Gulf-linked airlines Qatar Airways and Emirates have done exceptional work in the Indian markets. Passengers have benefited from their presence. Let us inform that on October 9, 2020, the then Civil Aviation Minister Hardeep Singh Puri had said that now we should give a clear message that foreign airlines will not be allowed to fly at the cost of Indian airlines. Let us tell you that a large number of international travelers from India use these two airlines to travel to America, Canada and Europe.