New Delhi, January 27
The government has notified the agreement between Air India and special purpose vehicle AIAHL for the transfer of non-core assets, ahead of the national airline’s takeover by the Tata Group.
The government had in October last year inked the share purchase agreement with the Tata Group for the sale of national carrier Air India for Rs 18,000 crore.
The Tata Group is expected to take full control of the airline, it founded in 1932, on Thursday. The cash component of the deal would come once the handover process is completed.
The Tata Group would pay Rs 2,700 crore cash and take over Rs 15,300 crore of the airline’s debt. The deal also includes sale of Air India Express and ground handling arm AISATS.
The transaction was to be completed by December 2021, but the deadline was later extended till January 2022, owing to longer-than-expected time taken to complete procedural work.
This will mark the return of Air India to the Tata fold after 67 years. The Tata Group founded had Air India as Tata Airlines in October 1932. The government nationalized the airline in 1953.
As a precursor to the handover process, the Department of Investment and Public Asset Management (DIPAM) on January 24, notified the framework agreement entered into by and between Air India Ltd and AI Assets Holding Ltd (AIAHL) for transfer of assets of the national carrier post it ceasing to be a public sector company.
AIAHL was set up in 2019, by the government for holding debt and non-core assets of the Air India group.
Four Air India subsidiaries — Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL), Air India Engineering Services Ltd (AIESL) and Hotel Corporation of India Ltd (HCI) — along with non-core assets, painting and artifacts, and other non-operational assets, was transferred to the SPV.
In October last year, Tatas beat 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 for the sale of its 100 per cent stake in the loss-making carrier.