New Delhi/ Mumbai: (Air India Privatization news) Tata Sons has emerged as the highest bidder for the Air India acquisition. According to highly placed sources, the govt has accepted Tata Sons' proposal to take over the national airline. However, it is believed that the official announcements about this development may take some time. "Air India's reserve price was likely to be in the range of Rs 15,000-20,000 crore", said sources. The government will divest its 100 percent stake in Air India, Air India Express and 50 percent stake in ground handling company (AISATS).
On Sept 15 only DIPAM Secretary Tuhin Kanta Pandey had tweeted "Financial bids for Air India disinvestment received by Transaction Adviser. The process now moves to the concluding stage".
This may be called as life coming full circle for Air India, which began life as Tata Airlines in 1932, as Tata Sons had ceded control of the airline to the the govt of newly independent India around half a century back then.
Reportedly, the bid submitted by Tata Sons was Rs 3,000 cr more than the min reserve price set by the govt committee. Accordingly a panel of ministers accepted the proposal from bureaucrats, who recommended the conglomerate's bid ahead of an offer from Spice Jet's Ajay Singh.
For Tata Group, Air India adds a third airline brand to its stable, considering the conglomerate already holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.
Air India hasn't turned a profit since its 2007 merger with Indian Airlines. Losses have been mounting ever since and the aviation company on sale is now saddled with a debt of around 600 billion rupees ($8.1 billion). However, Air India does have some attractive assets, including prized landing and parking slots at London's Heathrow airport, which may help Vistara lure business travellers with direct flights to Europe. It is pertinent to remark here that the purchase, once done, will be a test of the group's aviation acumen.
Tata Group has faced criticism for not running its existing aviation businesses efficiently, even though they represent a tiny portion of overall revenue.
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