The Indian government announced on Friday that Tata group has been chosen as the winning bidder to take over the stat-run air carrier Air India.
Air India will head back to the Tata Group after decades of flying as the national carrier, Department of Investment and Public Asset Management (DIPAM), Secretary, Tuhin Kanta Pandey announced Friday.
Tata Sons, the holding company for the autos-to-steel Tata conglomerate, bid Rs 180 billion ($2.40 billion) for the government’s 100% stake in Air India, a finance ministry official told reporters.
On October 4, a panel of ministers led by Home Minister Amit Shah authorized the bid, according to Pandey.
The transaction is expected to be close by end of December this year. The central government had started evaluating the bids for the debt-laden national carrier earlier last week.
Reports suggest the Tata Group is the front-runner to win the Maharaja, while SpiceJet’s Ajay Singh is the other bidder competing for the airline. The evaluation of bids was done against an undisclosed reserve price.
In the opening remarks and presentation by DIPAM, Tuhin Kanta Pandey said: “The FM had said in her Budget speech that the Govt of India aims to complete the Air India divestment in FY22. The competitive process has been carried out in a transparent manner.”
He added: “Bidders had to quote min 15% of enterprise value for cash consideration. Bidders were to quote max 85% of quoted enterprise value for retained debt.”
Ratan Tata has tweeted, welcoming Air India to the Tata Group. He added that it will take “considerable effort to rebuild Air India”.
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