Air India Handover To Tata Group Likely To Be Delayed By A Month Till January 2022
Tata Group’s acquisition of Air India likely to be delayed by a month
New Delhi:
Tata Group’s acquisition of loss-making national carrier Air India is likely to be delayed by a month till January 2022, as the completion of processes is taking longer than expected, an official said on Monday.
In October, the government accepted the highest bid by the Tata Sons company for 100 per cent equity shares of Air India and Air India Express as well as its 50 per cent stake in ground-handling company AISATS – the first in 20 years. privatization.
At the time, the government had said it wanted to complete the transaction by the end of December, which involved paying Tata Rs 2,700 crore in cash.
As per the terms in the SPA, all the handover formalities have to be completed within 8 weeks but this date can be extended mutually by the buyer and seller and is being done in this case.
However, some regulatory approvals are yet to come for the handover, and some formalities are yet to be completed, the official, who did not wish to be named, said.
“The process will be completed by January,” he said without specifying a specific date.
On October 25, the government had signed a share purchase agreement with Tata Sons for the sale of national carrier Air India for Rs 18,000 crore. Tata will pay Rs 2,700 crore in cash and will take over Rs 15,300 crore of the airline’s debt.
Another official said that the cash component will come after the handover process is completed.
Tata surpassed the Rs 15,100 crore offer by SpiceJet promoter Ajay Singh-led consortium and the Rs 12,906 crore reserve price set by the government for the sale of its 100 per cent stake in the loss-making carrier.
Tata will not get to retain non-core assets such as Air India’s Vasant Vihar Housing Colony, Nariman Point, Air India Building in Mumbai and Air India Building in New Delhi.
Of the 141 Air India aircraft received by Tata, 42 are leased aircraft, while the remaining 99 are owned.
While this will be the first privatization since 2003–04, Air India will be the third airline brand in the Tata stable – it has a majority stake in Vistara, a joint venture with AirAsia India and Singapore Airlines Ltd.
