Published 13:27 IST, December 14th 2020
Tata Sons to bid for Air India; files Expression of Interest for troubled flag carrier
India's salt-to-software conglomerate Tata Group has reportedly submitted an Expression of Interest (EoI) for the debt-laden national carrier Air India.
- India News
- 2 min read
India's salt-to-software conglomerate Tata Group has reportedly submitted an Expression of Interest (EoI) for the debt-laden national carrier Air India on Monday. As per the sources familiar with the development, the Tata Group will use Air Asia as a vehicle where Tata Sons have a significant majority stake. Meanwhile, the group already runs two airlines in India, one is low-cost AirAsia India and the other is full-service airline Vistara.
The government, in May 2018, had made the first attempt to sell 76 per cent stake in Air India but had failed to attract suitors who were uncomfortable with the government retaining a 24 per cent stake in the airlines as well as the requirement to stay invested for at least 3 years. Another reason why the government's attempt to sell Air India stakes failed was its debt worth Rs 33,000 crore.
'Tata group hired top legal consultants for bidding': Reports
Tata Sons established Tata Airlines in 1932 and that was renamed as Air India in 1946. The Tatas gave control of its airline venture to the government in 1953, exactly 67 years ago.
As per a media report, Tata Group in August 2020, had hired top legal firms and consultants to conduct the due diligence before bidding for the national carrier. Furthermore, there were speculations that the company was planning to merge ithe two companies. However, the officials from the conglomerate in August said that no such discussions have taken place formally.
Air India's March 2020 disinvestment bid
The government in March 2020 had offered a 100% stake in the national carrier to potential bidders besides relaxing a substantial part of the airline's debt. Under this disinvestment bid, Air India planned to sell a 100% stake in Air India Express and 50% shareholding in AISATS, an equal joint venture between Air India and Singapore Airlines. The government-owned airline’s interests in entities such as Air India Engineering Services, Air India Air Transport Services, Airline Allied Services and Hotel Corporation of India were not a part of the disinvestment transaction. As per the bid document, a debt of Rs.23,286.5 crore could remain with Air India and Air India Express at the time of closing of the disinvestment.
Updated 13:27 IST, December 14th 2020