Government signs SPA with Tata for Air India disinvestment – Times of India – India Times English News


New Delhi: The government on Monday signed the Share Purchase Agreement (SPA). Tata Group for Air IndiaThe target is to transfer the airline to its new owner by the end of this financial year.
The Rs 18,000-crore deal, for which Tata will have to pay Rs 2,700 crore upfront and borrow Rs 15,300 crore, will now enter its most critical phase of completing the crucial “Preparation of Conditions” (CP).
The government will retain AI’s Rs 44,679 crore debt in the SPV, which will be gradually repaid by monetizing non-aviation assets such as land and buildings.
In the CP phase, approval will be sought from regulatory agencies including Competition Commission of India (CCI), Directorate General of Civil Aviation (DGCA), lessors, lenders and other third party vendors.
“The hard part is usually CCI, but if the combined domestic or international stake of the four Tata group airlines is not close to 50%, then in this case it will not be an issue. Similarly, there are doubts that Indians have substantial ownership and influence control of AI-Tata,” say the people.
After meeting the CP requirements, the closing balance sheet will be prepared on the date of completion of the CP. An infection management will be set up with representatives from Bombay House.
Unless there is a difference of opinion between the outgoing and incoming owners on the balance sheet, Tata will pay Rs 2,700 crore and then take control.
The new owner currently has AirAsia India with Boeing 787, B737 and A320 along with Vistara and A320 in its fleet. AI and AI Express will soon join the group.
“Until the Tatas decide which model they adopt – a mega airline by merging AI Express and AirAsia India with all four or a low-cost branch and a full-service one with AI plus Vistara – they will continue with the existing Air operators will remain. Can continue to operate aircraft on various permits (reading licenses). Once they decide on a model, an airline or two, they will need another AOP which is issued after due diligence It is done. It is,” said senior officials.
While the government wants AI to be transferred to Tatas by the end of this calendar year, the process could be a bit lengthy and happen by the end of next March, say people.