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New Delhi: The Ministry of Finance has said on Thursday that the strategic disinvestment of Air India is now complete with the government receiving Rs 2,700 crore from Talace Pvt Ltd, a wholly owned subsidiary of Tata Sons. In a statement, the government said, "The Air India strategic disinvestment transaction has been completed today with Government receiving a consideration of Rs 2,700 crore from the Strategic Partner (M/s Talace Pvt Ltd, a wholly owned subsidiary of M/s Tata Sons Pvt Ltd), retaining debt of Rs 15,300 crore in Air India and AIXL and transferring shares of Air India (100 percent shares of Air India and its subsidiary AIXL and 50 percent shares of AISATS) to the Strategic Partner."
Commenting on the development, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said, "I feel very relieved today. It has been a roller coaster ride with legal challenges." Pandey added that the debt of Rs 15,300 crore, which was to be retained, "is being retained" and the final balance sheet has been prepared with non-core assets to be moved which the government will monetise. Broadly, the debt to be taken over by the SPV has been repaid by the holding company, said the top bureaucrat.
He added that four existing directors of Air India will continue to remain on the company's new Board of Directors post privatisation.
"The Tata Group takes over management and control of the airline, starting today. 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," said Tata Sons in an official statement.
In a letter addressed to Air India's employees, Air India's new Chairman N Chandrasekaran said, "I like many others, have enjoyed reflecting on stories from the airline's brilliant past. My first flight was with Air India in December 1986, and I will never forget how special it felt to be onboard, or the exhilaration as we soared into the sky."
"Such memories are wonderful, but now is the time to look ahead. Today is the beginning of a new chapter. The entire nation's eyes are on us, waiting to see what we will achieve together. To build the airline our country needs, we need to look to the future. I write this letter on behalf of the Tata Group, to welcome you to our family," the letter said.
Following the government's approval of 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 October 11, 2021. The Share Purchase Agreement (SPA) was signed on October 25, 2021. "Thereafter, 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 statement released by the government said.
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