The government on Monday signed a share purchase agreement with Tata Sons for the strategic disinvestment of the national carrier Air India for Rs 18,000 crore.
The government on Monday signed a share purchase agreement with Tata Sons for the strategic disinvestment of the national carrier Air India.
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Earlier this month, as Tatas once again gained control of Air India for Rs 18,000 crore, the government accepted an offer by Talace Private Limited, Tata Sons' special purpose vehicle (SPV), to pay Rs 2,700 crore cash and take over Rs 15,300 crore of the airline's debt.
The sale of Air India to the Tatas was the first sale of a public sector unit since the sale of Indian Petrochemicals Corporation Ltd (IPCL) in 2002.
Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM) had earlier told CNBC-TV18 that the Air India disinvestment has been an extremely complicated one.
“One of the reasons is that a huge amount of public funds, taxpayers funds, have gone into supporting Air India over the years in their turnaround plan and financial restructuring plan (FRP) which was sanctioned,” he said.
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The divestment brings a much-needed boost to the aviation sector that has been affected by COVID-19, Pandey said. Calling it a win-win situation for taxpayers, employees and other stakeholders, he further explained that the private management will infuse a lot of funds in the airlines, add more assets and restructure the business of Air India.
Air India Director- Finance, Vinod Hejmadi, Civil Aviation Ministry Joint Secretary Satyendra Mishra and Supraprakash Mukhopadhyay from the Tata Group signed the share purchase agreement (SPA).
Tata Sons would now have to take various regulatory clearances, including from the Competition Commission of India (CCI), before the actual handover of the airline takes place by December end.
Also Read: Air India, Tata deal benefits all areas of civil aviation, says Aviation Minister Jyotiraditya Scindia
The government is divesting its 100 percent ownership of Air India and Air India Express along with its 50 percent stake in ground-handling company AISATS.
(Edited by : Kanishka Sarkar)