Sources said the SBI-led consortium has agreed to grant both term loans and working capital loans depending on the airline's requirements.
All large lenders, including Punjab National Bank, Bank of Baroda, and Union Bank of India, are part of the consortium, they added.
Talace Private Limited -- a subsidiary of the Tata Group's holding company
A unit of the holding company of the salt-to-software conglomerate had offered Rs 18,000 crore as part of its winning bid -- Rs 15,300 crore for Air India's existing debt and Rs 2,700 crore to be paid as cash to the government.
On October 11, 2021, a Letter of Intent (LoI) was issued to the Tata Group confirming the government's willingness to sell its 100 per cent stake in the airline. On October 25, the Centre signed the share purchase agreement for the deal.
The term loans to Talace will help in retiring the high cost borrowings of Air India, the sources said.
The deal with the government does not include land and buildings. As per the agreement, Tata Group will retain all the employees of Air India at least for a year.
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.
Tata Group had surpassed the Rs 15,100 crore-offer by a consortium led by
While this will be the Centre's first privatisation since 2003-04, Air India will be the third airline brand in the Tatas' stable as it holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.
As of August 31, Air India had a total debt of Rs 61,562 crore. Around 75 per cent of this debt or Rs 46,262 crore will be transferred to a special purpose vehicle AIAHL before handing over the loss-making airline to Tata Group.
Air India started suffering losses every year since its merger with Indian Airlines in 2007-08.
A Turnaround Plan (TAP) and a Financial Restructuring Plan (FRP) were approved for Air India by the previous UPA regime in 2012. However, the TAP did not work out as expected and Air India continued to reel under losses.
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.
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