Govt signs share purchase pact with Tatas for Air India sell-off

By: |
October 26, 2021 3:45 AM

As part of the deal, the government will get Rs 2,700 crore or 15% of the bid amount in cash, while the balance (Rs 15,300 crore) will go towards clearing a portion of the airline’s debt.

These assets will be transferred to government-owned Air India Asset Holding.These assets will be transferred to government-owned Air India Asset Holding.

The government on Monday signed an agreement with Tata Sons for the sale of crisis-ridden national carrier Air India for Rs 18,000 crore. In a tweet, department of investment and public asset management (Dipam) secretary Tuhin Kanta Pandey said: “Share Purchase Agreement signed today by Government with Tata Sons for strategic disinvestment of Air India.”

As part of the deal, the government will get Rs 2,700 crore or 15% of the bid amount in cash, while the balance (Rs 15,300 crore) will go towards clearing a portion of the airline’s debt.

Earlier this month, the government had accepted the financial bid put in by Tata Sons through a special purpose vehicle Talace Pvt Ltd for the sell-off of the national carrier.

As per the deal, besides 100% ownership of the airline, the Tatas will also acquire 100% stake in Air India Express and 50% in Air India SATS Airport Services. The transaction, however, doesn’t include the national carrier’s non-core assets, including land parcels and buildings, including the one at Mumbai’s Nariman Point, which, put together, are valued at Rs 4,718 crore. These assets will be transferred to government-owned Air India Asset Holding.

Tatas had beaten a Rs 15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the offer also exceeded the reserve price of Rs 12,906 crore set by the government for its entire stake sale in the carrier.

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