The TATA Group regains control of Air India after 69 long years. Mumbai-based TATA group surrendered its share in the airlines to the Central government.
The Chairman of TATA Group, N Chandrasekhran, met the Prime Minister on Thursday. He completed all the formalities for the final-handing over on Thursday. It was a much-awaited arrival for the group.
Tata Sons said in a press release, “We philosophically agree with the Prime Minister’s vision for the aviation sector, of making it affordable and ensuring it contributes to boosting ‘Ease of Living’ for citizens.”
The TATA Group had emerged a winner in the bidding of Air India. The bid was of Rs. 18,000 crore. Out of this, TATA group were to take over Rs 15,300 crore worth of debt and Rs. 2,700 crore was to be paid the government in cash.
The Airline had a total debt of Rs. 60,000 crore, as on August 31, 2021. The remaining debt is transferred to a special category vehicle AI holdings Ltd. The group held the non-core assets so that it can monetize and repay the debt.
According to media reports, currently, the four internal directors are retained by the Tata Group. Viz – finance, personnel, commercial and operations.
While, the decisions regarding bidding were made. It was decided that the Tata Group must retain all employees of Air India for one year. However, they can be offered a voluntary retirement scheme (VRS) in the second year, after the close of the transaction.
Meanwhile, Air India has 12,085 employees. Presently, 8,084 are permanent and 4,001 work on contractual basis. Around 1,434 work in Air India Express. However, more than 5000 permanent employees will retire in the next five years.
Furthermore, it is decided that the Air India brand or logo should be retained for five years. However, it can change its logo but it should be to an Indian entity.
