Air India Sale: A group led by Ajay Singh, chairman of Tata Sons and SpiceJet has made a financial bid for Air India on September 15, 2021. Recent media reports state that Tata Sons, its 100 per cent arm Tales Pvt Ltd and SpiceJet CEO Ajay Singh have submitted these bids in their individual capacity and in connivance with some investment funds.
Who is bidding for Air India?
Tata Sons, AirAsia India, which operates Vistara, is at the forefront of the bidding process for the sale of Air India. Tata Sons has submitted its bids through its 100% branch Tales Pvt Ltd. The company’s shareholders had given their approval to a fund raising program of Rs 40,000 crore through non-convertible debentures to finance this acquisition and invest in businesses.
The Tata group established Tata Airlines in the year 1932, which was named Air India in the year 1946. The Government of India took over the control of Air India in the year 1953.
SpiceJet CEO of Ajay is making this bid in his personal capacity.
Privatization of Air India: What will the successful bidder get?
The sale of Air India will give the successful bidder control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports. The winning bidder will also get 900 slots at airports abroad.
The successful bidder will get 100 per cent of the low-cost Air India Express and 50 per cent of Air India SATS Airport Services Pvt Ltd (AISATS), which provides cargo and ground handling services at major Indian airports.
Other properties such as Airlines House in Delhi, Air India building in Mumbai, Air India subsidiaries such as Air India Air Transport Services Limited (AITSL), and Air India Engineering Services Limited (AIESL) will be part of the deal. The bidder will also get 04 acres of land for AI employees in various housing societies in Delhi’s Connaught Place, Mumbai, Delhi and other cities.
Air India Sales: Background
In the year 2018, the Indian government had tried to sell 76 percent stake in Air India, but failed. The government’s attempt to retain a 26 per cent stake in the loss-making national carrier two years ago was a major hurdle in the disinvestment of Air India.
The Indian government is set to sell its 100 per cent stake in Air India Airline along with two other subsidiaries: low-cost Air India Express and 50 per cent stake in Air India SATS Airport Services Private Limited (AISATS) in 2021.
Air India’s total debt has reached Rs 43,000 crore, out of which Rs 22,000 crore will be transferred to Air India Asset Holding Limited (AIAHL) and the rest will be borne by the successful bidder. The Government will bear the transferred amount to AIAHL before transfer of the airline to the successful bidder.