New Delhi: Tata GroupAcquisition of loss making national airline Air India An official said on Monday that there is likely to be a delay of a month till January due to longer than expected completion of the processes. In October, the government issued a . Highest bid accepted by Tata Sons The company – the first to hold 100 per cent equity shares of Air India and Air India Express along with its 50 per cent stake in ground-handling company AISATS privatization in 20 years.
At the time, the government had said it wanted to complete the transaction by the end of December, which involved paying Tata Rs 2,700 crore in cash.
As per the terms in the SPA, all the handover formalities have to be completed within 8 weeks, but this date can be extended mutually by the buyer and seller and is being done in this case.
However, some regulatory approvals are still pending and some formalities are yet to be completed, the official said on condition of anonymity.
“The process will be completed by January,” he said without specifying a specific date.
On October 25, the government had signed a share purchase agreement with Tata Sons for the sale of national carrier Air India for Rs 18,000 crore. Tata will pay Rs 2,700 crore in cash and will take over Rs 15,300 crore of the airline’s debt.
Another official said that the cash component will come after the handover process is completed.
Tata beats the Rs 15,100 crore proposal of the consortium led by SpiceJet A reserve price of Rs 12,906 crore set by the government for the sale of its 100 per cent stake in promoter Ajay Singh and the loss-making carrier.
As on August 31, Air India had a total debt of Rs 61,562 crore. 75 per cent of this debt, or Rs 46,262 crore, will be transferred to AIAHL, a special purpose vehicle, before the loss-making airline is handed over to the Tata group.
Tata will not get to retain non-core assets such as Air India’s Vasant Vihar Housing Colony, Nariman Point, Air India Building in Mumbai and Air India Building in New Delhi.
Of the 141 Air India aircraft received by Tata, 42 are leased aircraft, while the remaining 99 are owned.
While this will be the first privatization since 2003–04, Air India will be the third airline brand in the Tata stable – it has a majority stake in Vistara, a joint venture with AirAsia India and Singapore Airlines Ltd.
Tata’s acquisition of Air India will give it access to 117 wide-body and narrow-body aircraft, and 24 other narrow-body aircraft of Air India Express Ltd, apart from 4,400 domestic and 1,800 international landings, and parking slots at domestic airports . ,
Air India started making losses every year since its merger with Indian Airlines in 2007-08.
A Turnaround Plan (TAP) and a Financial Restructuring Plan (FRP) for Air India were approved earlier UPA government in 2012. However, the TAP did not work, and Air India was running at a loss, with the government giving Rs 20 crore per day to keep the airline afloat.
Over Rs 1.10 lakh crore has been invested in the form of cash support and loan guarantees to keep the loss-making airline afloat in the last decade.
At the time, the government had said it wanted to complete the transaction by the end of December, which involved paying Tata Rs 2,700 crore in cash.
As per the terms in the SPA, all the handover formalities have to be completed within 8 weeks, but this date can be extended mutually by the buyer and seller and is being done in this case.
However, some regulatory approvals are still pending and some formalities are yet to be completed, the official said on condition of anonymity.
“The process will be completed by January,” he said without specifying a specific date.
On October 25, the government had signed a share purchase agreement with Tata Sons for the sale of national carrier Air India for Rs 18,000 crore. Tata will pay Rs 2,700 crore in cash and will take over Rs 15,300 crore of the airline’s debt.
Another official said that the cash component will come after the handover process is completed.
Tata beats the Rs 15,100 crore proposal of the consortium led by SpiceJet A reserve price of Rs 12,906 crore set by the government for the sale of its 100 per cent stake in promoter Ajay Singh and the loss-making carrier.
As on August 31, Air India had a total debt of Rs 61,562 crore. 75 per cent of this debt, or Rs 46,262 crore, will be transferred to AIAHL, a special purpose vehicle, before the loss-making airline is handed over to the Tata group.
Tata will not get to retain non-core assets such as Air India’s Vasant Vihar Housing Colony, Nariman Point, Air India Building in Mumbai and Air India Building in New Delhi.
Of the 141 Air India aircraft received by Tata, 42 are leased aircraft, while the remaining 99 are owned.
While this will be the first privatization since 2003–04, Air India will be the third airline brand in the Tata stable – it has a majority stake in Vistara, a joint venture with AirAsia India and Singapore Airlines Ltd.
Tata’s acquisition of Air India will give it access to 117 wide-body and narrow-body aircraft, and 24 other narrow-body aircraft of Air India Express Ltd, apart from 4,400 domestic and 1,800 international landings, and parking slots at domestic airports . ,
Air India started making losses every year since its merger with Indian Airlines in 2007-08.
A Turnaround Plan (TAP) and a Financial Restructuring Plan (FRP) for Air India were approved earlier UPA government in 2012. However, the TAP did not work, and Air India was running at a loss, with the government giving Rs 20 crore per day to keep the airline afloat.
Over Rs 1.10 lakh crore has been invested in the form of cash support and loan guarantees to keep the loss-making airline afloat in the last decade.
,