The Union Home Minister Amit Shah-led Group of Ministers (GoM) comprising the Air India Specific Alternative Mechanism (AISAM), will meet next week to grant the final nod for the sale of the beleaguered national carrier, Air India. Apart from the Home Minister, the panel includes Union Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Aviation Minister Jyotiraditya Scindia. The panel is expected to meet next week, likely by Wednesday. Accordingly, the official announcement will be done.
Four bidders had entered the race to by the airline, but only two bids, Tata Group and SpiceJet chief Ajay Singh in his personal capacity were able to make it to the final stage. On Friday, there was sudden news that Tata Sons had been selected as the winning bidder for the debt-laden state-run airline. However, the Secretary of Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey, scotched such rumours by saying, “Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. Media will be informed of the Government decision as and when it is taken.”
As per sources, the panel of ministers has accepted a proposal from officials recommending the sale to the salt-to-software conglomerate, but this will happen only after the panel meets to grant its nod for the transaction. “The highest decision-making body constituted for the national carrier’s divestment is yet to meet to grant its nod for the transaction. Bids have been opened and the winner has been decided but the announcement will come only after the committee of ministers approves it,” a source told The Daily Guardian.
Ensuring utmost confidentiality about the reserve price, it was only after the bids were submitted, Air India’s reserve price was fixed so that the bidders did not get to know about the reserve price prior to their bidding. Explaining the process, the source said, “Once the approval from the GoM comes, bidders need to deposit a mandatory 15% of the amount of the final bid. The share purchase agreement (SPA) has already been given to the bidders in a recent meeting and in around four months the airline will be handed over to new owners completely.” The government will divest its 100% stake in Air India, Air India Express and 50% stake in the ground handling company.
If Tata Sons emerges as the leading bidder, it will be like history coming full circle as it was J.R.D. Tata who founded the airline in 1932 under the original name Tata Airlines. This is the second attempt by the Prime Minister Modi-led government to sell Air India. The Centre had made an unsuccessful attempt to sell the ailing airline earlier in March 2018. However, its expression of interest to sell 76% stake in Air India had no takers at that juncture due to concerns regarding the airline’s burgeoning debt.