Letter of intent was issued to Tata Group.
The government on Monday issued a letter of intent confirming the sale of its 100 per cent stake in loss-making Air India to the Tata group for Rs 18,000 crore. A senior official gave this information. The government last week accepted a proposal by Tata Group-owned Teles Pvt Ltd to pay Rs 2,700 crore in cash and take responsibility of Rs 15,300 crore from the airline’s debt.
After that, a letter of intent has now been issued to Tata confirming the government’s willingness to sell its 100 per cent stake in the airline. Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) said, “The letter of intent has been issued today.” After the letter of intent, the share purchase agreement will be signed. The Tata Group will need to fulfill the transaction conditions before it can take over the operations of Air India.
LOI issued to the successful bidder in the strategic disinvestment transaction of AI. SPA will be signed soon. pic.twitter.com/6joroBqbnC
– Secretary, DIPAM (@SecyDIPAM) October 11, 2021
SPA will be completed within 14 days
“Generally within 14 days of the acceptance of the letter of intent, the Share Purchase Agreement (SPA) is signed. We expect the SPA to be signed soon.” Pandey said the deal is targeted to be completed by the end of December. After the signing of the SPA, regulatory approval will be given after which the transfer of operations process will be initiated.
270 crore bank guarantee
“When they give the sanction letter, they will give payment security of 1.5 per cent of the EV (undertaking value) which is Rs 270 crore,” Pandey said. Rs 270 crore will be in the form of payment security in the form of bank guarantee which we will get along with the acceptance letter. The deal also includes the sale of Air India Express and AISATS, a ground-level maintenance unit.
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Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.