Tata Group to get loans from SBI-led consortium for Air India
After nearly 70 years, Tata Group on Thursday regained ownership of Air India. With the completion of the deal, the group will own 100 per cent stake in Air India, Air India Express and a 50 per cent shareholding in AISATS.
Bankers said the SBI-led consortium has agreed to grant both term loans and working capital loans depending on the airline's requirements.
Existing lenders who do not wish to participate in refinancing of debt to Tatas will get their money repaid through the refinanced amount, the banker said.
Life Insurance Corporation of India (LIC) is among the entities that had given loans earlier to loss-making Air India. Now, the IPO-bound LIC has decided not to extend more loans to the airline and will not participate in the current funding round led by the SBI, the bankers said.
Talace Private Limited -- a subsidiary of the Tata Group's holding company Tata Sons -- on October 8, 2021, won the bid to acquire debt-ridden Air India. It had offered Rs 18,000 crore, including cash of Rs 2,700 crore which has now been paid to the government.
The amount of loans likely to be extended by the consortium could not be immediately ascertained.
''The strategic disinvestment transaction of Air India successfully concluded today with transfer of 100 per cent shares of Air India to M/s talace Pvt Ltd along with management control,'' DIPAM Secretary Tuhin Kanta Pandey said in a tweet on Thursday.
As of August 31, 2021, Air India had a total debt of Rs 61,562 crore. Around 75 per cent of this debt or Rs 46,262 crore has been transferred to a special purpose vehicle AIAHL as part of handing over the loss-making airline to Tata Group.
Over the last decade, more than Rs 1.10 lakh crore has been infused by way of cash support and loan guarantees into Air India to keep it afloat.
With the acquisition, Tata Group will have access to a fleet of 117 wide-body and narrow-body aircraft, and 24 narrow-body aircraft of Air India Express. Besides, it will get control of 4,400 domestic and 1,800 international landing, and parking slots at domestic airports.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)