Tata Sons Ltd has acquired an additional 32.67 per cent stake in Air Asia India for $37.6 million.
Now, Tata son holds 83.6 per cent stake in the Indian airline.
The move comes when the group has showed interest in the ongoing divestment process of Air India.
The airline is a joint venture with Tata Sons holding 51 per cent stake in the airline and AirAsia Investment Limited (Malaysia) holding the remaining stake.
Call and Put option
There will be a Call Option regarding Air Asia’s remaining 16.33 per cent stake which can be exercisable by Tata Sons at any time after the transaction is completed.
Similarly, AirAsia India will have a put option, in two tranches.
The first tranche being exercisable from 1 March 2022 until 30 May 2022, and the second tranche being exercisable from 1 October 2022 to 31 December 2022.
AirAsia India’s revenue dropped 69 percent in the September quarter.
While its losses for the second quarter weren’t disclosed, in the first, it went deeper in the red.
Its losses zoomed to Rs 332 crore, from Rs 15 crore, a year earlier.
The airline commands a 7.1 percent share of the domestic civil aviation market.
Comment from Air Asia
“As India is a non-core market for AirAsia (being a non-ASEAN country), the Company will continue to regularly re-assess its business strategies and dispose of non-core investments to augment its liquidity”
“This transaction will reduce cash burn of the Company in the short term and allow AirAsia to concentrate on recovery of its key ASEAN markets in Malaysia, Thailand, Indonesia and the Philippines in the long run.”
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