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Tata plans take off with debt-loaded Air India

Reports indicate the group held talks to buy controlling stake as government looks to divest the beleaguered airline

Published: 22nd June 2017 01:28 AM  |   Last Updated: 22nd June 2017 07:45 AM   |  A+A-

By Express News Service

NEW DELHI/MUMBAI: If reports are to be believed, Air India could soon be reunited with its original parent — the Tata Group. According to news reports, the Tatas held informal talks with the government, expressing preliminary interest in picking a controlling stake (51 per cent) in the loss-making national carrier.

“It’s true that Air India was once owned by the Tatas and there’s an emotional angle. However, it cannot be handed over to anyone without process and scrutiny as part of reforms planned by the government,” said a senior government official. Tata Group declined a comment.

The official added that privatisation was once of the suggestions received by the ministry to revive the airline. However, he said the Cabinet has to take a final decision on the matter. “Divestment is one of the options that may be looked at. If that is the case, the Tatas will have to bid along with others.”

Experts say the deal will be a ‘nothingburger’ unless critical issues like debt restructuring, voluntary retirement scheme and fleet management are resolved. A case in point is the privatisation of IDBI, which has no takers minus the non-core assets.

“Even the stake will have to be carefully decided, since 51 per cent will mean the buyer will have management control. It’s a politically sensitive issue and is not easy to be decided in a few meetings,” the official added.  

The revival of Air India, which has been in the red since the merger with Indian Airlines a decade ago, has created a rift among ministries and departments. While the government think-tank Niti Aayog recommended complete privatisation, the Civil Aviation Ministry believes selling stake would be like handing it over to a private player on a platter.

For Tatas, which already has two partnerships (Air Asia, Vistara), this could give an edge to regain leadership. But the deal could put pressure on the company, which already has significant debt.


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