NEW DELHI: The Government of India on Monday signed an Share Purchase Agreement (PSA) of Air India with Salt-to-Software conglomerate Tata Sons subsidiary company Tata Talace Pvt. Ltd. for Rs 18,000 crores.
‘Share Purchase Agreement signed today by Government of India with Tata Sons for strategic disinvestment of Air India’ said Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM).
Post signing of the agreement Tata Talace will provide Rs 2700 crores in cash and Rs 15,300 crores will be absorbed as debt has to be consumed as part of the national carrier’s debt.
Officials from the Bombay House have to agree to the conditions set by the government before the final takeover of the Maharajah.
It will take at least a month for the final paperwork to handover the carrier to Tata Sons. The transaction will be completed by December end confirms DIPAM Secretary.
This marks the exit of the central government in the full service carrier business. But remember the government still holds the Air India Assets Holding Limited (AIAHL) which still holds much of its business range from Alliance Air to Hotels Corporation and its debt of Rs 43,000 crores.
The Government is planning to monetize or going to sell the assets as part of its strategic disinvestment to reduce its debt.