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After Air India, Tata takes over Neelachal Ispat Nigam

At present, NINL has an integrated steel plant with a capacity of 1.1 MT, at Odisha’s Kalinganagar. The company has been running in huge losses and the plant has been closed since March 30, 2020….reports Asian Lite News

The Centre has approved Tata Steel Long Products’ bid to buy steel producer Neelachal Ispat Nigam, an official statement said on Monday.

The Centre’s ‘Alternative Mechanism’ approved the bid for buying 93.71 per cent of shares of JV partners of four CPSEs and two Odisha state government PSEs at the bid enterprise value of Rs 12,100 crore.

The Centre does not hold any equity in the company.

“However, on the request of the Boards of selling shareholder PSEs and on concurrence by the Govt of Odisha, the CCEA ‘in principle’ approved strategic disinvestment of NINL on January 8, 2020, and authorised Department of Disinvestment & Public Asset Management (DIPAM) to undertake the transaction,” the statement said.

At present, NINL has an integrated steel plant with a capacity of 1.1 MT, at Odisha’s Kalinganagar. The company has been running in huge losses and the plant has been closed since March 30, 2020. Besides, it has debt and liabilities exceeding Rs 6,600 crore as on March 31, 2021, including overdues of promoters, banks, other creditors and employees.

The company has negative networth of Rs 3,487 crore and accumulated losses of Rs 4,228 crore as of March 31, 2021.

“Tata Steel Long Products Ltd (TSLP) emerged as ‘H-1’ bidder, whose bid has been accepted by the AM. Letter of Intent (LoI) is being issued to TSLP inviting them to sign the SPA. At this stage, 10 per cent of the bid amount shall be paid by the successful bidder into the Escrow account.

“This is the first instance of privatisation of a public sector steel manufacturing enterprise in India. The success of the transaction is a win-win situation for all.”

As per the Finance Ministry, the biggest advantage of this privatisation will be to the local economy of the region as the strategic buyer will be able to revive a closed plant, bring in modern technology, best managerial practices and make infusion of fresh capital, which will help in augmenting the capacity of the plant.

“Govt. of Odisha has given active support to the process of privatisation. The privatisation will help in creating new jobs in the region by creation of ancillary industries and supplier’s network.

“Keeping in view the best interest of the serving employees, it was decided to keep the employees’ dues as the top most ranking liability in the ‘Waterfall Agreement’ to be satisfied first before any other liability.”

Furthermore, the ministry cited that the transaction is on “going concern” basis and the employees of NINL will continue to be the employees of the company in terms of the ‘Share Purchase Agreement’ (SPA), which binds the buyer to have a lock-in period of one year.

“The strategic buyer will also be bound to follow the terms of VRS applicable to CPSEs whenever such a decision is taken.

“Post-sale consideration will go towards settling of the liabilities of the company, in the order provided in ‘Waterfall Agreement’.”

ALSO READ: It’s official: Tata takes over Air India

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It’s official: Tata takes over Air India

The acquisition envisaged 100 per cent equity share capital of Air India and Air India Express, and 50 per cent for that of Air India SATS Airport Services by Talace….reports Asian Lite News

Pic credit Twitter @airindiain

 The Centre on Thursday handed over the management control of national carrier Air India to a subsidiary of Tata Sons.

With this Air India’s strategic disinvestment was complete after the Centre received a consideration of Rs 2,700 crore from the ‘Strategic Partner’ — Talace — which is a wholly owned subsidiary of Tata Sons.

Besides the upfront payment, Talace will retain a debt of Rs 15,300 crore.

Notably, the transaction covered three entities – Air India, Air India Express and AI SATS.

“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. A new Board, led by the Strategic Partner, takes charge of Air India,” tweeted Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM).

On Thursday, Tata Sons Chairman N. Chandrasekaran called on Prime Minister Narendra Modi in Delhi ahead of the official handover of Air India.

Afterwards, at ‘Airlines House’, the HQ of Air India, a new board was constituted which included Tata Group’s executives.

“We are excited to have Air India back in the Tata Group and are committed to making this a world-class airline,” Chandrasekaran said.

“I warmly welcome all the employees of Air India, to our Group, and look forward to working together.”

Last month, the Competition Commission of India had approved the acquisition of Air India, Air India Express and Air India SATS Airport Services by Talace.

The acquisition envisaged 100 per cent equity share capital of Air India and Air India Express, and 50 per cent for that of Air India SATS Airport Services by Talace.

The airline, along with AIXL, is primarily engaged in the business of providing domestic and international scheduled air passenger transport service, along with air cargo transport service.

Air India SATS Airport Services is engaged in the business of providing ground handling services at Delhi, Bengaluru, Hyderabad, Mangaluru and Thiruvananthapuram airports, and cargo handling services at Bengaluru airport.

Tata Sons’ subsidiary Talace had emerged as the highest bidder for the national carrier under the divestment process.

It had quoted an enterprise value of Rs 18,000 crore for 100 per cent equity shareholding of the Centre in Air India along with that of Air India Express and AISATS.

On its part, the Centre had stipulated a reserve price of Rs 12,906 crore.

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Tata takes back Air India

Under the deal now, Tata Sons will acquire Air India, 50 per cent of Air India-Sats, and Air India Express…reports Asian Lite News

Life has come full circle for the Tata Group which has emerged as the winning bidder to takeover Air India, an airline that they once started and nurtured before the government decided to nationalise the air carrier in 1953.

In a throwback of the journey the airline has taken so far, Ratan Tata, the Chairman Emeritus of Tata Sons, on Friday tweeted an old photograph of the company’s former Chairman J.R.D. Tata getting down from an Air India aircraft, minutes after Tata Sons won the bid to regain control of the airline.

“Welcome back, Air India!”, Ratan Tata tweeted.

“The Tata Group winning the bid for Air India is great news! 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 said.

“On an emotional note, Air India, under the leadership of Mr JRD Tata, had, at one time, gained the reputation of being one of the most prestigious airlines in the world. Tatas will have the opportunity of regaining the image and reputation it enjoyed in earlier years. Mr JRD Tata would have been overjoyed if he was in our midst today,” Ratan Tata tweeted.

“We also need to recognise and thank the government for its recent policy of opening select industries to the private sector. Welcome back, Air India!,” he said.

It was in 1932 that Tatas’ journey into the aviation sector in India began, which in 1946 led to the renaming of the Tata Airline to Air India after the entity turned public. The airline went out from its hands in 1953 when the government decided to nationalise it.

Under the deal now, Tata Sons will acquire Air India, 50 per cent of Air India-Sats, and Air India Express. The government will get Rs 2,700 crore in cash from the sale. The rest is the government’s debt, which Air India will take over.

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