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Tatas firmly in the driver’s seat to acquire Air India

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Tata Sons has quoted a better price than SpiceJet promoter Ajay Singh for Air India Ltd within the preliminary bidding round, consistent with people conscious of the event

MUMBAI, New Delhi : Tata Sons Pvt. Ltd, the company of Tata Group, has quoted a better price than SpiceJet promoter Ajay Singh for Air India Ltd within the preliminary bidding round, two people with direct knowledge of the event said, seeking anonymity. the govt hopes to privatize India’s flag carrier by the top of the present financial year .

According to the people, Tata Sons is within the driver’s seat within the proposed disinvestment process, with the second wave of covid leading to reduced ratio and suspension of aviation , constricting the cash flows of Air India and lowering its valuation.

“The qualitative matrices include parameters like years of experience in managing aviation business, size of airline fleet managed and countries operated in, leadership structure, brand and goodwill, expertise in managing large non-core assets, experience in handling retirement and pension benefits, expertise in managing workforce, among others,” said one among the 2 people cited above.

However, the divestment of Air India could get delayed by a couple of months as due diligence, like physical inspection of (real estate) assets by a bidder will need to be deferred thanks to the pandemic, Tuhin Kanta Pandey, secretary, department of investment and public asset management (Dipam)—the nodal agency running the divestment process—had said on Wednesday.

Speaking on the sidelines of the “Mint India Investment Summit”, he said the govt was targeting the completion of Air India’s divestment within the half of FY22, but “there might be a touch little bit of a slippage in terms of time”.

So far, Tata Group and SpiceJet’s chairman and director Ajay Singh, in his individual capacity, are shortlisted to bid for the carrier, as per media reports.

The aviation industry is one among the worst impacted by the pandemic because the surging number of infections hasled to a fall in demand for aviation .

Due to the prevailing situation, Tata Sons is considering a lower valuation for Air India and is probably going to urge for a better absorption of the airline’s debts by the Centre.
Air India has around $10 billion worth of debts, of which Tata Sons may ask the govt to require care of quite $5

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