Tata Sons, the promoter of Tata companies has ironed out the difference with the government over three key areas that is pension liabilities, real estate assets and debt, according to a LiveMint report. It also stated that the final talks between both parties are taking place. Post this discussion, a financial bid will be submitted by the Tata group before the end of April.
The Tata group, which already owns AirAsia India and Vistara is one of the bidders for Air India. Meanwhile, another bidder is a consortium of SpiceJet chairman Ajay Singh, Ras Al Khaimah Investment Authority and Ankur Bhatia, promoter of Delhi-based Bird group.
The report stated that a large number of Air India’s employees are set to retire in the coming years, making the change of ownership of the company a sensitive issue for the staff. The employees are of the option that the government take care of pension-related matters, rather than leaving it on the private entity. In addition, both sides are also discussing the ownership of the real estate assets of Air India, including staff quarters and residential colonies. It is unclear what happens to those assets after the control of the airline changes hands. Most of Air India’s real estate assets have been transferred to a special purpose vehicle (SPV) called Air India Assets Holding Ltd in 2019 as part of the government’s disinvestment process. “While Tata Sons is keen to have such assets under its own control, post the acquisition of Air India, many employees may not be keen to see residential premises and other real estate assets of the airline going under the control of a private entity," the person said.
Air India had a net debt of about Rs 58,255 crore as of 31 March 2019. In 2019, the government moved Rs 29,464 crore of this debt to the SPV.
The government is keen to sell Air India, which has been surviving on a government bailout. The Tata group, which already owns AirAsia India and Vistara, hopes the purchase of Air India will allow it to access airport slots in India and abroad and a large fleet of aircraft. But the airline also comes with a huge debt load, a unionised workforce and large pension liabilities.