On Monday, The government approved a share purchase contract with Tata Sons for the sale of national carrier Air India for. Earlier this month, the government had taken a proposal by Talace Pvt Ltd, a unit of the holding company of the salt-to-software conglomerate, to pay Rs 2,700 crore cash and take over Rs 15,300 crore of the airline’s debt.
On October 11, a Letter of Intent (LoI) was assigned to the Tata Group, validating the government’s readiness to sell its 100 per cent stake in the airline.
“Share Purchase Agreement signed today by Government with Tata Sons for strategic disinvestment of Air India,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.
Share Purchase Agreement signed today by Government with Tata Sons for strategic disinvestment of Air India. pic.twitter.com/DRjKODxGbM
— Secretary, DIPAM (@SecyDIPAM) October 25, 2021
The agreement also involves the selling of Air India Express and ground handling arm AISATS. Tatas defeated the Rs 15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12,906 crore set by the government to sell its 100 per cent stake in the loss-making carrier.
While this will be the first privatisation since 2003-04, Air India will be the third airline brand in the Tatas’ stable — it holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.