The government has begun an evaluation of financial bids received from Tata Group and SpiceJet founder for the acquisition of Air India, people privy to the development told media.
With this, the privatisation process of the national flag carrier has moved to the next phase as the government looks to expeditiously conclude the deal. The financial bids are being evaluated against an undisclosed reserve price and the bid offering the highest price above that benchmark would be accepted.
If successful, this will mark the return of Air India to Tata fold after 67 years. The Tata Group founded Air India as Tata Airlines in October 1932. The government nationalised the airline in 1953.
The government is seeking to sell 100 per cent of its stake in the state-owned national airline, including Air India's 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
The stake sale process, which begun in January 2020, faced delays due to the COVID-19 pandemic. In April 2021, the government asked potential bidders to put in financial bids. The last day for placing financial bids was September 15.
Tata Group was among the multiple entities that had put in an initial expression of interest (EoI) in December 2020 for buying the Maharaja.
With previous attempts since 2017 failing to get any significant interest and after receiving feedback from potential investors, the government in October last year sweetened the EoI 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.
As per the Air India EoI floated by the Department of Investment and Public Asset Management (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 23,286.5 crore. The rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.
Air India has been in losses ever since its merger with domestic operator Indian Airlines in 2007.
(With inputs from PTI)
