Competition Commission of India (CCI) today approved Tata Group’s acquisition of Air India, Air India Express and Air India SATS Airport Services.
Talace, which is a wholly-owned subsidiary of Tata Sons, has also been allowed by the anti-trust regulator to acquire shares in Air India Express and Air India SATS Airport Services, the CCI tweeted.
“The proposed combination envisages acquisition of 100 per cent equity share capital of Air India Limited (Air India) and Air India Express Limited, and 50 per cent equity share capital of Air India SATS Airport Services Private Limited by Talace Private Limited (Talace),” the Commission said in an official release.
The regulatory approval comes more than two months after Tata Sons, the controlling entity of Tata Group, won the bid to acquire the debt-ridden Air India.
The Tatas had placed a winning bid of Rs 18,000 crore, which was higher than the reserve price of Rs 12,906 crore fixed by the government.
The total debt of Air India as on August 31 stood at Rs 61,560 crore. Debt which will be taken over by Tatas will be Rs 15,300 crore while Rs 46,262 crore will remain with Air India Asset Holdings Ltd, which is a special purpose vehicle created to retain the non-core assets, land and the debt of Air India which Tata will not be taking on.
Selling Air India, which has not made profits in 15 years, was a vital piece in the government’s ambition to privatise assets. Finding a buyer was tough because the airline— nicknamed Maharaja—has long struggled to stay aloft, was steeped in losses and bruised by competition.
For Tata Group, this acquisition marked a homecoming as the airline was founded by JRD Tata with a capital of Rs 2 lakh in 1930. It was later nationalised in 1953.