LoI issued to Tata group for Air India sale
No change in 49% FDI cap
On 11 October 2021, the government issued a letter of intent (LoI) confirming the sale of its 100 per cent stake in Air India to Tata Group for Rs.180 billion, according to Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey. Tatas now have to accept the LoI, post which the Share Purchase Agreement (SPA) will be signed. After SPA is signed, the regulatory approvals will have to come in following which the handover process will start. Last week, the government had accepted an offer by Talace Pvt Ltd, a subsidiary of Tata Sons, to pay Rs.27 billion in cash and takeover Rs.153 billion of the airline’s debt. The deal is targeted to be closed by December end. Speaking to Hindu Businessline, Pandey clarified that, at present, there will be no change in foreign direct investment (FDI) policy for Air India. In private airlines, non-aviation players can have up to 100 per cent FDI, whereas there is a cap of 49 per cent for foreign airlines specifically. However, for Air India, the entire cap is 49 per cent.