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‘Reset’ of the Indian business environment: Anand Mahindra on Air India disinvestment

Our Bureau Mumbai | Updated on October 10, 2021

Says the government is renewing faith in the potential efficiency of the Pvt.sector

Mahindra Group Chairman Anand Mahindra lauded the disinvestment of Air India by the Government, calling it a ‘reset’ of the Indian business environment.

“I may be accused of overstating the importance of this event but I think this divestment amounts to a ‘reset’ of the Indian business environment. Yes, the Govt. is dispensing of a cash drain; But it’s also renewing faith after decades in the potential efficiency of the Pvt.sector,” said Mahindra in a tweet.

Rebuild Air India’s image

Mahindra’s tweet quoted a statement by Ratan Tata, Chairman Emeritus of Tata Sons, who said JRD Tata would have been overjoyed if he was alive today with Air India coming back to the Tata group fold.

Also see: How to make public debt sustainable

“Air India, under the leadership of JRD Tata had, at one time, gained the reputation of being one of the most prestigious airlines in the world. Tatas will have the opportunity of regaining the image and reputation it enjoyed in earlier years. JRD Tata would have been overjoyed if he was in our midst today,” Tata said.

Tata acknowledged that though it will take considerable effort to rebuild Air India, it will hopefully provide a strong market opportunity to the Tata group’s presence in the aviation industry. “Welcome back, Air India!” Tata said.

Retake reins

Starting in January, the Tata Group will take the reins of Air India again after 68 years, with the government deciding to sell the national carrier to Talace Private Limited, a special purpose vehicle of Tata Sons. The airline was founded in 1932 by JRD Tata.

Also see: ‘Welcome back, Air India!’: Ratan Tata

The government had set the reserve price at ₹12,906 crore while the Tata Sons’ special purpose vehicle bid ₹18,000 crore enterprise value. The second bid was for ₹15,100 crore.

Of the ₹18,000 crore, the government will get ₹2,700 crore in cash while the remaining amount will be in the form of debt transferred to the new entity. With this, the entire 100 per cent shareholding of Air India along with AI’s shareholding in Air India Express Limited (AIXL) and AISATS will be handed over to the new owner.

Published on October 09, 2021

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