MUMBAI/NEW DELHI :
Tata Sons Ltd, the front-runner to buy state-run Air India Ltd, and the government are close to sealing the terms of the purchase, having managed to narrow their differences on the three key sticking points of pension liabilities, real estate assets and debt, two people familiar with the matter said.
Final talks between both parties are underway, and a financial bid will be submitted by the Tata group as early as this month, the people said on condition of anonymity.
The government is keen to sell Air India, which has been surviving on a government bailout. The airline has failed to turn in an annual profit since it was merged with state-run Indian Airlines in 2007. The Tata group, which already owns AirAsia India and Vistara, hopes the purchase of Air India will give it access to lucrative airport slots in India and abroad and a large fleet of aircraft. But the airline also comes with a huge debt load, a unionized workforce and large pension liabilities.
A large number of Air India’s workers are set to retire in the coming years, which also makes the change of ownership of the company a sensitive issue for the staff, many of whom prefer that the government take care of pension-related matters, one of the people said.
Both sides are also discussing the ownership of the vast real estate assets of Air India, including staff quarters and residential colonies, after the control of the airline changes hands, the second person said. Most of Air India’s real estate assets have been transferred to a special purpose vehicle (SPV) called Air India Assets Holding Ltd in 2019 as part of the government’s disinvestment process.
“While Tata Sons is keen to have such assets under its own control, post the acquisition of Air India, many employees may not be keen to see residential premises and other real estate assets of the airline going under the control of a private…