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'A historic moment’: Chandrasekaran on Tata Group emerging winner for Air India

'A historic moment’: Chandrasekaran on Tata Group emerging winner for Air India

Tata Sons Chairman says it will be a rare privilege for the group to own and operate the country's flag-bearer airline.

Tata Sons Chairman N Chandrasekaran Tata Sons Chairman N Chandrasekaran

After emerging as the successful bidder for loss-making state-owned Air India, Tata Sons Chairman N Chandrasekaran, in a statement today, said Tata group is delighted to be declared as the winner of the bid for Air India.

"This is a historic moment, and it will be a rare privilege for our group to own and operate the country's flag bearer airline. It'll be our endeavour to build a world-class airline, which makes every India proud," Chandrasekaran said.

Chandrasekaran said he would like to pay "tribute to JRD Tata, pioneer of India aviation, whose memory we cherish".

Earlier, Tata Sons Chairman Emeritus Ratan Tata had also expressed his happiness on Tatas winning the bid, saying: "Welcome back, Air India".

"The Tata group winning the bid for Air India is great news! While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata group's presence in the aviation industry," he said.

During a press briefing in New Delhi, Secretary of the Department of Investment and Public Asset Management Tuhin Kanta Pandey had announced Talace Pvt Ltd of Tata Sons as the winning bidder at Rs 18,000 crore.

"The transaction is expected to close by the end of December 2021," he said. The government decided to sell a 100 per cent stake in Air India, which had a total debt of Rs 61,562 crore as of August 31.

Around Rs 46,262 crore debt of the state-owned airline will be transferred to Air India Assets Holding Limited (AIAHL), while 15 per cent of the total debt will be retained by Tatas, Pandey said.

The winning bid is for Rs 18,000 crore as Enterprise Value consideration for 100 per cent shareholding in the company. The total bid worth Rs 18,000 crore comprises taking over of Rs 15,300 crore debt and rest of the amount, which is Rs 2,700 crore, will be paid in cash. The transaction does not include non-core assets including land and building, valued at Rs 14,718 crore, which are to be transferred to GoI's Air India Asset Holding Limited (AIAHL).

The deal makes Tata Group the second-largest airline operator in the domestic market with a 26.7 per cent market share and behind the market leader IndiGo, with a 57 per cent market share.

The Tata group will get Air India's 4,400 domestic and 1,800 international landing and parking slots at Indian airports, while 900 slots at international airports.

The Tatas already have two airlines in its kitty -- Vistara and AirAsia. Even though they are facing losses, Tata as a conglomerate has unmatched financial competence.

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