Air India’s handover to Tatas expected soon after Republic Day
An internal message sent to employees of the airline informed them that the closing balance sheet was to be submitted by the end of Monday
Air India (AI) is likely to be formally handed over to the Tata group by the end of this week, officials with knowledge of the matter said on Monday, signaling that process to transfer the debt-laden national carrier was nearing an end.
AI officials said the final handover date was not finalised but they aimed to hand over the airline by Thursday. “We cannot confirm a date, but the final handover has to happen this week,” an AI official said, declining to be named.
An AI spokesperson refused to comment on the matter.
The national carrier, which began its journey under the Tatas 90 years ago before the government nationalized the sector in 1953, was sold to the autos-to-steel Tata conglomerate, which will pay ₹18,000 crore for a 100% stake. The sale was announced on October 8 by the Union government.
Talace Pvt Ltd, a wholly-owned subsidiary of Tata Sons, will get 100% equity shares of AI and AI Express, along with the government’s 50% stake in ground-handling company AISATS.
An internal message sent to AI employees said that the closing balance sheet was to be submitted by the end of Monday, said the officials cited above. The balance sheet was then to be forwarded to the Tata Sons for review.
“The closing balance sheet as of 20th January has to be provided today (Monday) 24th January so that it can be reviewed by Tatas and any changes can be effected on Wednesday,” the message, which HT has seen, said.
It added the next three days will be hectic and requested airline employees to give their best before the firm is divested. “We may have to work late in the night to complete the task given to us,” the message added, seeking cooperation of the employees.
Officials are working round the clock to complete all procedures this week. They may have to work even on January 26 so that the handover can be done on Thursday, said a second AI official, requesting anonymity. “We have done an excellent job till now in providing support for the disinvestment exercise,” the official added.
On October 8, the Tatas beat the ₹15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of ₹12,906 crore set by the government for the sale of its 100% stake in the loss-making carrier.
The bid amount includes Tata’s taking on of about ₹15,300 crore of the national flag carrier’s ₹61,562 crore debt. The remaining will be transferred to Air India Assets Holding Limited (AIAHL), a special purpose vehicle formed by the government.
On October 11, a Letter of Intent (LoI) was issued to the Tata group confirming the government’s willingness to sell its 100% stake in the airline. On October 25, the Centre signed the share purchase agreement (SPA) for this deal.
The deal was a boost for the government’s disinvestment drive and financial books. In the 2021 financial year, which was battered by the pandemic, the airline was estimated to have lost ₹27 crore a day.
For Tata Group, AI is the third airline in its stable – it already holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd. It will also fetch the company prized landing and parking slots. At present, AI has control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas such as London’s Heathrow and New York’s JFK.