New Delhi:
Tata Group’s acquisition of loss-making flag carrier Air India is likely to be delayed by a month to January 2022 as the proceedings take longer than expected, an official said Monday.
In October, the government accepted the highest bid from a Tata Sons company for 100 percent shares of Air India and Air India Express, along with its 50 percent stake in ground handling company AISATS – the first privatization in 20 years.
At the time, the government had stated that it wanted to complete the transactions, including Tatas paying Rs 2,700 crore in cash, by the end of December.
According to the conditions in SPA, all formalities of delivery should be completed within 8 weeks, but this date can be mutually extended by the buyer and seller and is done in this case.
However, some regulatory approvals have yet to come in for the transfer and certain formalities still need to be completed, the official said, who declined to be named.
“The process is said to be completed in January,” he said without giving a specific date.
On October 25, the government had signed the share purchase agreement with Tata Sons for the sale of the flag carrier Air India for Rs 18,000 crore. Tata’s would pay Rs 2,700 crore in cash and assume Rs 15,300 crore of the airline’s debt.
The cash component would come once the transfer process is complete, another official explained.
Tatas beat the bid of Rs 15,100 crore from a consortium led by SpiceJet promoter Ajay Singh and the minimum price of Rs 12,906 crore set by the government for the sale of its 100 percent stake in the loss-making airline.
Tatas will not retain non-core assets such as Air India’s Vasant Vihar Housing colony, Air India Building at Nariman Point, Mumbai and Air India Building in New Delhi.
Of the 141 Air India aircraft that Tatas will receive, 42 are leased, while the remaining 99 are owned.
While this will be the first privatization since 2003-2004, Air India will be the third aviation brand in Tatas’ stable – it owns majority stakes in AirAsia India and Vistara, a joint venture with Singapore Airlines Limited.