After nearly 70 years, Tata Group on Thursday regained ownership of Air India. (File)
New Delhi:
A group of lenders led by the State Bank of India (SBI) will soon provide loans to Tata Group to service Air India’s operations as well as remove its high-cost loans. this airline.
After nearly 70 years, Tata Group on Thursday regained ownership of Air India. With the completion of the transaction, the group will own a 100% stake in Air India, Air India Express and a 50% stake in AISATS.
Bankers said the consortium led by SBI had agreed to grant both a term loan and a working capital loan depending on the airline’s request.
All major lending institutions, including Punjab National Bank, Baroda Bank and Union Bank of India, are part of the consortium, they added.
“Many banks have agreed to refinance Air India’s debt to Tatas and the process has already begun,” one of the bankers said.
Existing lenders who do not wish to participate in Tatas refinancing will be reimbursed their funds through the refinanced amount, the banker said.
Life Insurance Corporation of India (LIC) is one of the entities that have previously lent to Air India. The IPO-bound LIC has now decided not to extend further loans to the airline and will not participate in the current funding round led by SBI, the bankers said.
Talace Private Limited – a subsidiary of Tata Group’s parent company Tata Sons – on October 8, 2021, won the tender to acquire heavily indebted Air India. It provided Rs 18,000 crore, including Rs 2,700 crore cash which has now been paid to the government.
The term loans to Talace will help eliminate Air India’s high-cost loans, bankers said.
The number of loans likely to be renewed by the consortium could not be immediately determined.
“Air India’s strategic divestment has been successfully concluded today with the transfer of 100% shares of Air India to M/s talace Pvt Ltd along with management control,” said DIPAM Minister Tuhin Kanta. Pandey said in a tweet Thursday.
As of 31 August 2021, Air India has a total debt of Rs 61,562 crore. About 75% of this debt or Rs 46,262 crore was transferred to an AIAHL dedicated vehicle as part of the handover of the loss-making airline to the Tata Group.
Air India started to suffer losses every year since its merger with Indian Airlines in 2007-08.
Over the past decade, more than Rs 1.10 lakh crore has been put into Air India by providing cash assistance and loan guarantees to keep it alive.
With the acquisition, Tata Group will have access to Air India Express’ fleet of 117 wide- and narrow-body aircraft and 24 narrow-body aircraft. In addition, it will have control over 4,400 domestic and 1,800 international routes, and parking spaces at domestic airports.
Air India will be the third airline brand in Tatas’ stable of networks as it already holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
