Tata Group chairman emeritus Ratan N Tata and Tata Sons chairman Natarajan Chandrasekaran are expected to soon meet a panel of ministers led by Home Minister Amit Shah to discuss the final contours of the salt-to-software conglomerate’s bid for Air India, two sources aware of the negotiations have told Moneycontrol.
The representatives of the Tata Group will also include Banmali Agrawala, president-infrastructure, defence and aerospace, and Saurabh Agrawal, chief financial officer of Tata Sons, sources said.
The government’s panel also includes Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Aviation Minister Jyotiraditya Scindia, sources said.
Tata Sons has emerged as the frontrunner to acquire the national carrier in the latest bid to privatise the debt-laden national carrier.
The panel of ministers will discuss the finals details of the deal such as debt restructuring, employee takeover, mode of payment and future plans for the national carrier with the Tata Group representatives, sources said.
Known as the Air India-Specific Alternative Mechanism, the empowered group of ministers led by Shah met on October 4 at his residence in New Delhi, reports said.
As reported by Moneycontrol, Tata Group may be willing to acquire around 15 percent of the airline's total debt in its bid to acquire the government's 100 percent stake in Air India.
Last week, officials from the Ministry of Civil Aviation, Department of Investment and Public Asset Management, and the Directorate General of Civil Aviation met officials from the Tata Group and Spicejet chairman Ajay Singh to discuss the sale of Air India after receiving financial bids from the two groups.
Sources told Moneycontrol that the government has likely set the minimum reserve price at around Rs 15,000 crore. The reserve price set is the price below which the government will not accept offers for the national carrier.
It is not immediately known if Tata or Singh's bids are above the reserve price, though media reports indicated that Tata had the higher bid.
The reserve price was decided on September 28 during a meeting of the committee of secretaries headed by Cabinet Secretary Rajeev Gauba.
Tata Sons, reports say, have sought a sovereign guarantee against any pre-acquisition financial or legal claims that Air India may face.
As part of its latest bid to sell Air India, the government changed the bidding norms in October 2020 and called bids based on enterprise value.
According to the new plan, the successful bidder does not have to absorb any predetermined debt. Air India has a net debt of around Rs 60,000 crore.
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