Tata Sons wins bid for acquiring national carrier Air India: What you need to know
Tata Sons is set to acquire Air India with a winning bid of Rupees18,000 crore, the government said on October 8, a homecoming moment for an airline it founded but gave control to the state.
The government approved the Tata offer over that of Spicejet chairman Ajay Singh, the only other bidder in the fray. His bid was around Rupees 15,100 crore.
The reserve price for Air India was fixed at Rupees 12,906 crore.
The total debt of Air India as on August 31 was Rupees 61,560 crore. Debt which will be taken over by Tata will be Rupees 15,300 crore while Rupees 46,262 crore will remain with Air India Asset Holdings Ltd, which is a special purpose vehicle created to retain the non-core assets, land and the debt of Air India which Tata will not be taking on. This means that the cash consideration of the deal will only be Rupees 2,700 crore.
Moments after the announcement, Ratan Tata in a tweet said," Welcome back, Air India."
Air India was founded by the Tata Group in 1932 and was nationalised in 1953. The group has evinced interest in acquiring the airline on several past occasions, including in 2001 along with Singapore Airlines but the bid was withdrawn at the very last stage.
The group also holds 83.67% stake in the low-cost airline AirAsia India.