Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) said on January 27 that the Air India handover to the Tatas was rife with legal challenges and he is relieved that the process is now complete.
After the strategic disinvestment transaction of Air India successfully concluded today with the transfer of 100 percent shares of Air India to M/s Talace Pvt Ltd along with management control, Pandey said: “I feel very relieved today; it (Air India sale to Tata Group) has been a roller coaster ride with legal challenges. Quite relieved that Air India transaction stands closed.”
Elaborating on the legal challenges, he said Dewas had emerged as one of the main hurdles for the Air India deal. Devas Multimedia, which had won more than $1.2 billion in international arbitration from India, had dubbed Air India the “alter ego” of the country and said that is liable for the sovereign’s debts. It had even joined hands with Cairn Energy Plc to seize Air India Ltd’s assets abroad.
He added: “The final balance sheet has been prepared with non-core assets to be moved; broadly the debt that had to be taken over by the special purpose vehicle (SPV) has been repaid by the holding company. The Rs 15,300 crore of debt which was to be retained is being retained.”
Notably, the Air India debt has largely been settled on supplementary funds, including government guarantees, non-convertible debentures (NCD), and excess current liabilities with oil companies, suppliers, Pandey said.
Giving out further details on the Air India divestment, the DIPAM Secretary said: “Air India’s non-core asset monetisation plan will be prepared; certain monetisation will take place after AIHL gets the land, which will be taken care of by the SPV.”
He clarified that it would not be possible to give a timeline for the monetisation of the non-core assets at the moment as the transaction process will be complex, for which DIPAM will “need to have the institutional capacity and learning for strategic sales”.