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December 7, 2001
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Tata Sons withdraws from Air-India bid

Divestment process in the civil aviation sector seems to have come to a grinding halt with Tata Sons, the sole bidder for Air-India, withdrawing from the race to acquire government stake in the national flag carrier.

Tata Sons director (Finance) Ishaat Hussain conveyed the company's decision to pull out in a letter to the divestment ministry earlier this week, sources said.

Privatisation of domestic carrier Indian Airlines too had fallen after two remaining bidders - Videocon and Hindujas - were disqualified by the government from acquiring stake for different reasons.

While withdrawing, Tata Sons cited its failure to find a suitable partner to fill-in for Singapore Airlines, which had pulled out on September one deciding against pursuing acquisition of Air-India stake due to "adverse climate".

Tatas also blamed the slump in the global aviation industry for putting in abeyance its decision to foray into airline business, the sources said.

Earlier, Hindujas, the only other bidder in the race for acquiring 40 per cent government stake and management control in Air-India, had pulled out.

SIA's withdrawal dealt a severe blow to the Tatas who failed to bring about a partnership in the airlines sector for the second time. Earlier, a Tata-SIA proposal to start a domestic airline was shot down by the United Front government in 1997-98 on the ground that an airline with foreign equity participation could not be permitted to fly the Indian sky.

ALSO READ:
Air-India: Of divestment and other issues

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