Tata Sons top bidder for Air India, now Amit Shah-led panel to take final call

Air India is likely to go to Tata Sons with the salt-to-software conglomerate emerging as the top bidder for the national carrier but a top ministers' panel, headed by Home Minister Amit Shah, is yet to give its approval.

The Tatas and Spicejet promoter Ajay Singh had submitted the bids for Air India before the deadline of September 15 and their bids were first examined by the Core Group of Secretaries on Disinvestment headed by Cabinet Secretary Rajiv Gauba on Wednesday, sources said.

Officials said bids were evaluated against the reserve price set and Tatas emerged as the highest bidder. Now, the Group of Ministers headed by Shah will take the final call.

As per the disinvestment plan, the government wants to sell 100 per cent stake in the state-owned national airline, including Air India's 100 per cent shareholding in Air India Express Ltd, and 50 per cent in Air India SATS Airport Services Private Ltd.

As some reports suggested that Tata Sons won the bid, Secretary to the Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey tweeted, "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."

If the bid is approved and Tata Sons takes over the national carrier, Air India will be returning to the corporate House 68 years after the government took over the airline and nationalised it.

JRD Tata founded the airline in 1932, then named Tata Airlines. In 1946, the aviation division of Tata Sons was listed as Air India and two years later, Air India International was launched with flights to Europe. Air India International was among the first public-private partnerships in India, with the government holding 49 per cent, the Tatas 25 per cent and the public owning the rest but in 1953, Air India was nationalised.

Initial attempts to disinvest the carrier faced trouble, following which the process was started again in January 2020 but the Covid-19 pandemic created hurdles. In April 2021, the government asked potential bidders to put in financial bids.

As the bidders were unenthusiastic about certain clauses, the government had in October last year amended the clause relating to the transfer of Air India's debt to the new investor, giving bidders flexibility to decide on the quantum of humongous debt they want to absorb.

According to the EoI floated by DIPAM in January 2020, of the airline's total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286 crore. The rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.

In July, DH had reported that the movable assets are proposed to be transferred to the new owner while immovable assets are being monetised by Air India to offset the debt of Air India Ltd. A Special Purpose Vehicle — Air India Assets Holding Ltd (AIAHL) — was set up for warehousing non-core assets of Air India. Monetisation proceeds of non-core assets were to be used to offset the debt of Air India transferred to AIAHL.

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