The Centre has set a mark to hand over the operations of the national carrier to Talace Pvt Ltd, a unit of the holding company of the coffee-to-cars conglomerate by December end.
Air India operations to Tata Sons
The government scheduled to hand over Air India operations to Tata Sons in December are likely to be delayed because of pending permissions and procedures.
In October, the Centre signed a share purchase deal with Tata Sons for the sale of Air India for Rs 18,000 crore. The government will get almost Rs 2,700 crore cash from Tatas and they will take over Rs 15,300 crore debt.
- Citing an unnamed official, said that the pre-determined conditions are yet to be completely met, after which the extended stop date will be clear.
- The Centre has set a target to hand over the operations of the national carrier to Talace Pvt Ltd, a unit of the holding company of the coffee-to-cars conglomerate by December end.
Longstop is a timeframe to meet all the requirements precedent to a transaction and the transaction completed.
The longstop date is normally 45 days from the date of execution of the agreement and can be extended by mutual consent of both parties.
The financial every day mentioned that a meeting will be held on Monday to revisit the progress of Air India’s disinvestment after which clarity may come about handing over Air India to Tata and the long stop date.
Ministry of Civil Aviation
The meeting will be attended by officials from the Department of Investment and Public Asset Management (DIPAM) and the Ministry of Civil Aviation (MoCA). After clarity on the long stop date, the financial reports will be prepared in deal with Tata on that date
The handover of Air India to Tata Sons also needs permissions from global competition regulators before closing the transaction, the day-to-day mentioned citing the official.
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On December 20, India’s competition regulator, the Competition Commission of India approved the deal.
August 31, Air India
As of August 31, Air India had total dues of Rs 61,562 crore. About 75 percent of this debt or Rs 46,262 crore will be transferred to a special purpose vehicle AIAHL before handing over the ailing carrier airline to Tata Group.
The deal does not include non-core assets such as land, buildings, etc., which are valued at around Rs 14,718 crore.
Earlier, reports surfaced that Tata Sons shortlisted an ex-pat chief executive officer (CEO) to head Air India. More importantly, the new Air India boss would reportedly finalize the management team for the airline.
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