INTERNATIONAL DESK: Tata Sons and a grouping led by SpiceJet chairman Ajay Singh placed financial offers for Air India on Wednesday, the last day to submit bids.
Tata Sons made the offer through its 100% arm Talace Private Ltd while Singh placed the financial bids in his personal capacity along with some investment funds, it is learned.
In a tweet, the department of investment and public asset management, without revealing names of the parties, said financial bids for Air India were received by the transaction adviser. “Process now moves to concluding stage,” it said. Tata Sons confirmed its participation to TOI.
EY is the transaction adviser to the government on Air India’s disinvestment. The Centre will soon set a floor price for the sale of the airline. Whoever quotes the highest bid over the floor price will claim the national carrier.
The government hopes to wrap up the sale of AI this year, marking a major milestone in the country’s privatisation programme. It has taken nearly 20 years for the cash guzzling airline to be sold.The Centre will soon set a floor price for the sale of the airline. Whoever quotes the highest bid over the floor price will claim the national carrier.
But the winner will also have to meet security audit standards. Air India has a debt of over Rs 43,000 crore, of which Rs 23,287 crore will be retained on its books while the rest will be transferred to Air India Asset Holdings, an entity incorporated to house non-aviation assets.
On Tuesday, Tata Sons shareholders had approved a fund-raise programme of Rs 40,000 crore via non-convertible debentures to finance acquisitions and invest in businesses.
Tata Sons – which operates Vistara and AirAsia India – is considered the frontrunner for Air India, according to industry observers. The company originally promoted Air India in 1932 but sold its interests to the government in 1953. Its financial bid signals its commitment to the air transport business.
The purchase will scale up its ambition of emerging as a significant player in the aviation sector. (The Times of India)