Tata Group takes over Air India in $2.4 billion deal
The Indian government has agreed to pay three-quarters of Air India's outstanding debt and relinquish all its shares in the airline. Tata is one of India's biggest companies.
The Indian government on Friday closed a deal to sell its national airline, debt-laden India Air, to the country's largest carmaker and steel producer, the Tata Group.
India's oldest conglemorate will pay 180 billion rupees (roughly €2.1 billion/$2.4 billion) to revive India Air, which has been running in the red since 2009 at a cost of 1.1 trillion rupees to the taxpayer.
Under the deal reached with Tata, the government will no longer have a share in the airline and Tata will only have to pay a quarter of Air India's debt burden of about 615 billion rupees. The debt which Tata is covering will come out of the purchase price to the government.
Tata's bid beat competition from
Spicejet chief Ajay Singh, who offered $2 billion.