New Delhi: Air India had to be sold because the debt had been piling up on it. The debt was so big that the government could no longer be sustained by the government, Civil Aviation Minister Jyotiraditya Scindia told NDTV. He said that it was next to impossible.
“The sale of Air India to Tata group was an ‘extremely difficult and challenging transaction’. This has been a landmark transaction under which all the debt has been taken care of and is a truly win-win transaction where everyone is a winner. It was an extremely difficult and challenging transaction from an accountancy point of view,” Mr Scindia said.
He says that the legal process was cropped up. He said, “A number of legal processes also cropped up and all those had to be met under a certain deadline, so that was a big challenge, but we managed to do it all.”
Thanking the officials he said, “I thank all the officials on both sides who worked so hard in the process and ensuring that this transaction is closed successfully. The credit goes to them.”
On August 31, 2021, Air India had a total debt of ₹ 61,562 crore. Of this, ₹ 46,262 crore is being transferred to a special purpose vehicle, or SPV. The balance debt has been cleared by Tata.
Tata’s winning bid for Air India was ₹ 18,000 crore, higher by ₹ 2,900 crore from the bid made by a consortium led by SpiceJet chief Ajay Singh. Tata has paid ₹ 2,700 crore in cash and taken over debt of ₹ 15,300 crore.
Minister says that the burden was on taxpayers, this is a win-win transaction and the airline is back to it’s owners. He said, “There had been a staggering loss and the burden was on taxpayers. That was just not right. Then this deal came through. This is a win-win transaction and Air India is now back with its erstwhile owners and I am certain that under their stewardship Air India has a bright future ahead.”
He said all Air India employees, whose jobs are protected for one year, are equal stakeholders in carving out a future for the airline.
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