NEW DELHI: Tata Sons, the holding company of Tata Group, India’s oldest conglomerate, has won the bid to acquire the debt-laden national flag carrier Air India, the Indian government said on Friday, almost seven decades after the airline founded by the group was taken over by the state.
Air India, founded as Tata Airlines in 1932, was nationalized in 1953. It has been running at a loss since 2007, with an estimated total debt of more than $8.1 billion.
The government said that only one-fourth of Air India’s debt will be incurred by the bidder, while the remaining amount would go to state-owned Air India Assets Holding Limited.
“We received two financial bids on Sept. 15. A panel of ministers cleared the winning bid. Tata is the winning bid,” Department of Investment and Public Asset Management Disinvestment Secretary Tuhin Kanta Pandey announced in a press conference in New Delhi.
“Tata presented a winning bid of RS18,000 crores ($2.4 billion),” Pandey said. “The transaction is expected to close by the end of December 2021.”
Civil Aviation Secretary Rajiv Bansal said during the same conference that the airline will be retained by Tata during the first year after the takeover.
“The current bidder will retain all the current employees of Air India for the first year. In the second year, they will see who to retain and can also give voluntary retirement from service,” Bansal said. “As of today, there are 12,085 employees in Air India, out of which 8,084 are permanent and 4,001 are contractual. Besides this, Air India Express has an employee strength of 1,434.”
Budget carrier Air India Express is a subsidiary of Air India.
Former head of Tata Group and chairman emeritus Ratan Tata welcomed the airline’s return to its fold.
“On an emotional note, Air India, under the leadership of J.R.D. Tata had, at one time, gained the reputation of being one of the most prestigious airlines in the world,” Tata said in a statement issued by the group. “While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group’s presence in the aviation industry.”
He added: “Tata will have the opportunity of regaining the image and reputation it enjoyed in earlier years. Mr. J.R.D. Tata would have been overjoyed if he was in our midst today.”
India’s first licensed pilot, J.R.D. Tata established the airline and used to fly mail between Mumbai and Karachi — which after the end of British colonial rule became a part of neighboring Pakistan.
Air India former executive director Jitendra Bhargava told Arab News that the airline’s return to the group will have a sizable impact on the country’s aviation industry. “It is a historic decision by the government to disinvest Air India,” he said. “This will have multiple effects on Indian aviation, one is that Air India will get a fresh lease of life, and second, all the carriers which were competing with the weak Air India will now have to compete with a strong Air India in a few months after the Tata takeover.”
Air India returns to Tata Group in $2.4bn deal
https://arab.news/22wuy
Air India returns to Tata Group in $2.4bn deal
- The government said that only one-fourth of Air India’s debt will be incurred by the bidder
Saudi investment pipeline active as reforms advance, says Pakistan minister
ALULA: Pakistan’s Finance Minister Mohammed Aurangzeb described Saudi Arabia as a “longstanding partner” and emphasized the importance of sustainable, mutually beneficial cooperation, particularly in key economic sectors.
Speaking to Arab News on the sidelines of the AlUla Conference for Emerging Market Economies, Aurangzeb said the relationship between Pakistan and Saudi Arabia remains resilient despite global geopolitical tensions.
“The Kingdom has been a longstanding partner of Pakistan for the longest time, and we are very grateful for how we have been supported through thick and thin, through rough patches and, even now that we have achieved macroeconomic stability, I think we are now well positioned for growth.”
Aurangzeb said the partnership has facilitated investment across several sectors, including minerals and mining, information technology, agriculture, and tourism. He cited an active pipeline of Saudi investments, including Wafi’s entry into Pakistan’s downstream oil and gas sector.
“The Kingdom has been very public about their appetite for the country, and the sectors are minerals and mining, IT, agriculture, tourism; and there are already investments which have come in. For example, Wafi came in (in terms of downstream oil and gas stations). There’s a very active pipeline.”
He said private sector activity is driving growth in these areas, while government-to-government cooperation is focused mainly on infrastructure development.
Acknowledging longstanding investor concerns related to bureaucracy and delays, Aurangzeb said Pakistan has made progress over the past two years through structural reforms and fiscal discipline, alongside efforts to improve the business environment.
“The last two years we have worked very hard in terms of structural reforms, in terms of what I call getting the basic hygiene right, in terms of the fiscal situation, the current economic situation (…) in terms of all those areas of getting the basic hygiene in a good place.”
Aurangzeb highlighted mining and refining as key areas of engagement, including discussions around the Reko Diq project, while stressing that talks with Saudi investors extend beyond individual ventures.
“From my perspective, it’s not just about one mine, the discussions will continue with the Saudi investors on a number of these areas.”
He also pointed to growing cooperation in the IT sector, particularly in artificial intelligence, noting that several Pakistani tech firms are already in discussions with Saudi counterparts or have established offices in the Kingdom.
Referring to recent talks with Saudi Minister of Economy and Planning Faisal Alibrahim, Aurangzeb said Pakistan’s large freelance workforce presents opportunities for deeper collaboration, provided skills development keeps pace with demand.
“I was just with (Saudi) minister of economy and planning, and he was specifically referring to the Pakistani tech talent, and he is absolutely right. We have the third-largest freelancer population in the world, and what we need to do is to ensure that we upscale, rescale, upgrade them.”
Aurangzeb also cited opportunities to benefit from Saudi Arabia’s experience in the energy sector and noted continued cooperation in defense production.
Looking ahead, he said Pakistan aims to recalibrate its relationship with Saudi Arabia toward trade and investment rather than reliance on aid.
“Our prime minister has been very clear that we want to move this entire discussion as we go forward from aid and support to trade and investment.”
