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Divestment Saga: Tata Sons emerge as highest bidder for Air India (2nd Ld)

 
New Delhi, Oct 8 (IANS) The Centre on Friday declared Tata Sons' subsidiary Talace as the highest bidder for national carrier Air India under the divestment process.

Talace quoted an enterprise value of Rs 18,000 crore for 100 per cent equity shareholding of the Centre in Air India along with that of Air India Express and AISATS.

Out of the 18,000 crore, Talace will retain Rs 15,300 crore, while the rest will be paid to the Centre as the cash component.

The bid was higher than the consortium led by industrialist Ajay Singh. The consortium had quoted an EV of Rs 15,100 crore.

On its part, the Centre had stipulated a reserve price of Rs 12,906 crore.

There were only two bidders in the final stage of divestment.

Conglomerate Tata Sons was touted to be the front-runner to get hold of the carrier.

Based on the bid results, the Centre will enter into a share purchase agreement (SPA) with Talace by December-end.

The decision to enter into the SPA with the Tatas was taken by the empowered Air India Specific Alternative Mechanism, it was announced here by Divestment Secretary Tuhin Kanta Pandey.

"The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement following which, the conditions precedent would need to be satisfied by the successful bidder, the company and Government," an official communique said.

"It is expected that the transaction will be completed by December 2021."

Besides, under the SPA, the jobs of Air India's employees will be safeguarded for one year.

At present, Air India has a total strength of 12,085 employees, which includes 8,084 permanent ones.

In addition, Air India Express has 1,434 employees.

According to Civil Aviation Secretary Rajeev Bansal, no employee will be removed for one year.

In the second year, if an employee has to be removed, then a VRS option will be provided.

Additionally, employees will be provided gratuity and provident fund benefits.

Post-retirement medical benefits to employees will be provided.

Post the announcement, Ratan Tata, the Chairman Emeritus of Tata Sons, tweeted: "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.

Meanwhile, SpiceJet Chairman and Managing Director Ajay Singh said: "I congratulate the Tata Group on winning the bid for Air India and wish them all the success. It was my honour and privilege to be shortlisted for bidding for Air India. I am confident that the Tata Group will restore the glory of Air India and make all of India proud."

"I would also like to congratulate the Government on the successful disinvestment of Air India. They ran a transparent and flexible process and gave new impetus to India's disinvestment program."

--IANS
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