Govt, Tata group sign share purchase agreement for AI
NEW DELHI: The winning bidder for the divestment process of Air India Ltd, Tata group, and the central government on Monday signed a share price agreement (SPA) for the sale of the national carrier, Tuhin Kanta Pandey, secretary of the finance ministry’s department of investment and public asset management (Dipam), said on microblogging and social networking site twitter.
The SPA, which is a legal contract between the seller and the buyer, was signed at Dipam office at New Delhi and was attended by top officials like civil aviation secretary Rajiv Bansal, Tuhin Kanta Pandey, SK Mishra (ministry of civil aviation) Air India’s director finance, Vinod Hejmadi, Tata group’s Saurabh Agarwal, Nipun Aggarwal, and Suprakash Mukhopadhyay, among others. The SPA was signed by SK Mishra, Vinod Hejmadi, and Suprakash Mukhopadhyay.
Earlier this month, India’s largest conglomerate Tata group was named the winning bidder for Air India, ahead of a consortium-led by SpiceJet Ltd chairman and managing director Ajay Singh.
Tata group holding company, Tata Sons Pvt. Ltd, through its wholly owned unit Talace Pvt. Ltd, submitted the winning bid of ₹18,000 crore as the enterprise value of Air India, against a reserve price of ₹12,906 crore.
Following the completion of the announcement of the winning bidder, the government had on 11 October issued a letter of intent (LoI) to the Tata group.
Upon the completion of the transaction, which the government hopes to conclude by December-end, the Tata group will be given full control of Air India and its low-cost unit Air India Express, as well as a 50% stake in ground handling company Air India SATS Airport Services Pvt. Ltd (AISATS), according to a finance ministry statement.
According to data by aviation consultancy firm AT-TV, the acquisition of Air India helps Tata Group leapfrog in the domestic aviation space ahead of most of its competitors with a market share of about 27%-35%.