The Indian government has agreed to sell the heavily-indebted Air India to the Tata conglomerate for 180 billion rupees (US$2.4 billion), the finance ministry said Friday.
Tuhin Kanta Pandey, head of the government privatisation department, said that Talace Pvt Ltd, a subsidiary of the Tata conglomerate, won the bidding for the airline.
“The transaction is expected to close by end of December 2021,” he added.
Tea-to-steel conglomerate Tata founded the airline as Tata Air in 1932 before it was privatised in the 1950s.
But in the 1990s Air India began to struggle with competition on domestic and international routes from Gulf carriers and no-frills airlines, and the firm started amassing huge losses and debts.
Successive Indian governments tried to privatise the company but its debts and New Delhi’s insistence on retaining a stake put off would-be buyers.
Last year Prime Minister Narendra Modi’s government, seeking to sell a raft of state assets, agreed to take bids for the entire company but to retain some of what the airline owes.
Tata also owns 51% in Indian airline Vistara – Singapore Airlines holds the remaining 49% – as well as an 84% stake in AirAsia India, all of which Tata will now try to bring together.