Tatas, SpiceJet place financial bids for Air India
New Delhi/IBNS: Salt-to-steel conglomerate Tata has moved a step closer to own Air India, an airline started by J R D Tata way back in 1932 as Tata Airlines, as media reports said that it has put in a financial bid for the airline.
Sources in the group confirmed that it had put in a financial bid for Air India, according to a Money Control report.
SpiceJet promoter, Ajay Singh, has also put in a financial bid, the Money Control reported.
"Financial bids for Air India disinvestment received by Transaction Adviser. The process now moves to the concluding stage," Secretary, Department of Investment and Public Asset Management (DIPAM), Tuhin Kanta Pandey stated.
Financial bids for Air India disinvestment received by Transaction Adviser. Process now moves to concluding stage. pic.twitter.com/0NxCJxX5Q1— Secretary, DIPAM (@SecyDIPAM) September 15, 2021
Civil Aviation Minister Jyotiraditya Scindia had made it clear that the September 15 deadline for completing the bidding process is fixed and will not be changed.
In 2013, the Tatas hit the Indian skies with Vistara and AirAsia India, partnering with Singapore Airlines and Malaysia's Air Asia, respectively.
Tatas started the airline in 1932 as Tata Airlines, which was later in 1946 renamed Air India. The government took control of the airline in 1953 but JRD Tata continued to be its chairman till 1977.
Air India is burdened with a huge debt of around Rs 43,000 crore of which Rs 22,000 crore will also be transferred to the Air India Asset Holding Limited (AIAHL), according to an ANI report.
"The debt of the airline has now increased to Rs 43,000 crore and all these loans are under government guarantee. And the government will bear this debt before the airline is transferred to the new owners," ANI quoted a source as saying.
The government is selling an entire 100 per cent stake in Air India that will give the successful bidder access to 1,800 international and 4,400 domestic landing and parking slots at domestic airports, as well as 900 slots at airports overseas, stated media reports.
The buyer will also get 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports, and 100 per cent stake in Air India Express, the low-cost carrier owned by Air India.
In the first attempt, nearly three years ago, the government had proposed to divest 76 per cent of the airlines. This time around, the government plans to sell 100 per cent stake in AI and AI Express. Additionally, the government has also offered an entire 50 per cent it owns in ground handling joint venture AI-SATS.
The government was also forced to extend the deadline several times due to the COVID-19 pandemic.