New Delhi: Tata Sons, the holding company of steel-to-salt conglomerate Tata group, has won the bid for national carrier Air India, sources said, adding that a ministerial panel led by Union Home Minister Amit Shah gave the approval to take over the debt-laden airline. An official announcement is awaited in this regard following the approval by the ministerial committee. Tata Sons were the highest bidder.
The Air India Specific Alternative Mechanism (AISAM) panel, formed under the leadership of Union Home Minister Amit Shah, has approved the conglomerate's proposal to take over the airline, said sources.
Also read: Air India divestment process: Bids completed, govt evaluating technical aspects, says Jyotiraditya Scindia
As per the sources, the government has finalised the minimum reserve price for the national carrier, based on future cash flow projection, brand value and slots in foreign airports. Sources said that the reserve price would be in the range of Rs15,000-20,000 crore.
A person in the know-how of things said that valuation firm RBSA Advisors and EY - the consultant for the disinvestment- had given a presentation to the committee of secretaries headed by Cabinet Secretary Rajiv Gauba on Tuesday. As per the rules, 15 per cent of the total enterprise value will have to be paid upfront in cash to the government and the rest will be used to reduce the debt burden on the airline, the person added.
"The total debt on the airline has risen to around Rs43,000 crore and the government will bear this debt before the airline is transferred to the new owners," sources say.
Also read: Govt begins Air India bid evaluation
The two entities - Tata Group and SpiceJet promoter Ajay Singh - had put in the bid on 15 September for Air India divestment. This was the second attempt of the Modi government to sell the national carrier as it did not find any takes in the first round itself when it offered to sell a 76 per cent stake in Air India in 2018.
However, Central government has denied media reports that Tata group has won the bid for Air India and said media will be informed of any decision as and when it is taken. "Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. Media will be informed of the Government decision as and when it is taken," said the Secretary of department of investment and public asset management (DIPAM) that falls under the Finance Ministry, on Friday.
