Air India returns to Tata after 68 years: Key takeaways

New Delhi, Oct 08: Tata Sons won bid for debt-laden national carrier Air India, acquiring 100 per cent shareholding. With this, Air India comes back to its founder after 68 years.

The entire disinvestment process has been carried out in a transparent manner, with due regard to confidentiality of the bidders, through multi-layered decision making involving Inter-Ministerial Group (IMG), Core Group of Secretaries on Disinvestment (CGD) and the empowered Air India Specific Alternative Mechanism (AISAM) at the apex Ministerial level. Transaction Adviser, Legal Adviser, Asset Valuer, professionals in their respective fields, have supported the entire process.

The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement following which, the conditions precedent would need to be satisfied by the successful bidder, the company and Government. It is expected that the transaction will be completed by December 2021.

Air India returns to Tata after 68 years: Key takeaways

• The winning bid is for Rs 18,000 crore. The government will get Rs 2,700 crore in cash from the Air India sale. The remaining is the government's debt, which Air India will take over.
• The total debt on Air India as of 31st August 2021 is Rs 61,562 crores. The debt which will be taken by the successful bidder will be Rs 15,300 crores. Debt position after debt taken over by the successful bidder will remain Rs 46,262 crores.
• The transaction does not include non-core assets including land and building, valued at Rs 14,718 crore, which are to be transferred to the government's holding company AIAHL.
• The winning bidder will retain all the employees. Nobody to be retrenched for one year. If after a year they are to be removed, they will be offered a VRS.
• Gratuity and PF benefits to be provided.
• The brands of @airindiain have eight logos that will be handed over to the new bidder and cannot be transferred for a period of five years.
• Even after the 5-year period, it cannot be transferred to any foreign entity.
• The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement following which, the conditions precedent would need to be satisfied by the successful bidder, the company and Government. It is expected that the transaction will be completed by December 2021.