After nearly seven decades, the Tata group took over Air India last week. And in this short period of nearly four days since the homecoming of Air India, a lot of changes have already begun taking place.?
After the Air India travellers heard a special audio announcement on Friday after the takeover by Tata group, a string of key financial decisions are being taken by Air India and Tata group.?
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As per people aware of the matter pertaining to Tata group¡¯s takeover of Air India, the Tata Group has chosen State Bank of India, Bank of Baroda and HDFC Bank as preferred bankers for Air India.
They also stated that last week, Tata Sons availed of a ? 10,000-crore loan from SBI and a ?5,000-crore loan from BoB. The loans are unrated, unsecured, and pegged at 4.25% annual interest rate.
The sources said that this new debt availed by the Tata Group will be used to refinance Air India's debt that was availed at over 10%.?
Last month, Tata Group had received sanction letters from at least 12-15 banks, offering about ?35,000 crore to finance the debt of Air India.
A banker aware of the developments had stated that the interest rate and other terms of the loan offered by all banks were almost similar. It appears that Tata Group has chosen to avail funding from a few banks.
Last week, the government transferred 100% of its shares in Air India to Tata's wholly owned subsidiary Talace Pvt Ltd, which has thus acquired Air India, offering ?18,000 crore including ?15,300 crore for the carrier's existing debt and ?2,700 crore cash to be paid to the government.
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After Tata group's takeover of the state-owned Air India, the Employees' Provident Fund Organisation (EPFO) has announced the onboarding of the airline for social security coverage. This will provide social security benefits to its employees. The approval was reportedly granted on January 13 after Air India Ltd applied for voluntarily cover under the EPF & MP Act 1952.
The social security benefits will be provided to around 7,453 Air India employees for whom contributions have been filed by Air India with EPFO for December 2021.?
The employees of Air India now will be entitled to following benefits under EPFO:
1) The employees will receive an extra 2% employer¡¯s contributions in their Provident Fund Accounts at 12% of their wages.?
2) Rules of EPF Scheme 1952, EPS 1995 and EDLI 1976 will now be applicable to the employees.
3) A guaranteed minimum pension of ?1,000/- will be available to employees and pensions to family and dependents in case of the death of an employee.
4) An assured insurance benefit in case of death of a member will be available in the range of minimum ?2.50 lakh and a maximum of ?7 lakh. No premium is charged to the EPFO covered employees for this benefit.
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Air India has recently appealed in a US court against Devas Multimedia, arguing that a recent change in ownership of the airline prevents demands for recovery of arbitration awards ($1.2 billion), which was given to the Indian startup by international courts over the cancellation of a satellite deal with Isro¡¯s commercial arm Antrix.
Based on Air India¡¯s request, the district court in New York can dismiss and dispose of the Devas case entirely, or it can identify remaining issues in the case if the demand is denied, according to a filing by the airline.?
Devas Multimedia, which is now under the control of a liquidator, is currently facing liquidation proceedings after the Supreme Court order. On January 17, the court had upheld the National Company Law Appellate Tribunal ruling to wind up the Bengaluru-based company.
According to Matthew McGill, a partner at Gibson, Dunn & Crutcher that represents several Devas shareholders,?"Devas, which is seeking $1.2 billion from the government of India, will continue to confiscate cash generated from some ticket sales overseas by Air India". The firm has already seized assets worth more than $30 million owned by Air India, he claimed.
Earlier today (31st January 2022), Air India tweeted about being the wings of new future post its takeover by the Tata Group. Surely, there are lots of hopes pinned from Tata group to revive Air India and begin the journey towards a brighter future for the airline.
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