After a long wait, the disinvestment process for Air India has been completed. The entire stake of the airline has been handed over to Tata Sons, the Centre announced on Thursday evening, marking its return to the salt-to-software conglomerate. A new board to run the airline also became functional from today.
“The strategic disinvestment transaction of Air India successfully concluded today with transfer of 100% shares of Air India to M/s Talace Pvt Ltd along with management control,” announced Tuhin Kanta Pandey, secretary of Department of Investment and Public Asset Management (DIPAM), which managed the stake sale on government’s behalf.
Senior officials from the Ministry of Civil Aviation, the DIPAM Secretary and Tata Group representatives met at the Air India headquarters in the national capital on Thursday to finalise the sale of the airline.
A new board, led by the Strategic Partner, has taken charge of Air India, Pandey further mentioned.
With the disinvestment procedure wrapped up, Tata Group formally takes over the management and control of Air India starting today, after a span of 69 years. The transaction covers the full-service, flag-carrier airline Air India, its low-cost subsidiary Air India Express, and cargo and ground service arm Air India SATS.
The central government has sold off its 100% stake in the state-owned national airline, including Air India's 100 per cent shareholding in Air India Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
The airline will be handled by Tata Sons’ wholly-owned, newsly-formed subsidiary Talace. Out of the total debt of ₹61,562 crore to Air India’s name, Talace will take over ₹15,300 crore. The remaining ₹46,262 crore will be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle formed by the government in 2019 for holding debt and non-core assets of the Air India group.
Commenting on the occasion, Tata Sons chairman N. Chandrasekaran says, “We are excited to have Air India back in the Tata group and are committed to making this a world-class airline. I warmly welcome all the employees of Air India to our group, and look forward to working together.”
Ratan Tata, chairman emeritus of the Tata Group, conveys his gratitude to the central government and its various departments for the successful handover of Air India to the conglomerate.
Air India was started by Jehangir Ratanji Dadabhoy Tata in 1932 with the moniker Tata Airlines. The aviation division of Tata Sons was listed as Air India in 1946, and it began flights to Europe in 1948 under the banner of Air India International. The latter was among India’s first public-private partnerships, with the government holding 49 per cent, the Tatas keeping 25 per cent and the public owning the rest. The airline was nationalised in 1953 by the nation’s first prime minister Jawaharlal Nehru.
The airline has been dragging its feet for the past several years, weighed down by a mountain of debt and recurring losses. Back in December, Air India had been incurring a monthly loss of ₹600 crore. In the face of mounting liabilities, the government decided to offload its stake in Air India.
In the second attempt to sell off the airline, Tata Group made the winning bid at ₹18,000 crore to bag the airline in October last year. Of this, ₹15,300 crore is in the form of debt, while the remaining ₹2,700 crore is in cash. The cash consideration has already been paid to the government.
The competition watchdog, Competition Commission of India (CCI) approved in December the acquisition of Air India by Talace.
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