AirAsia India, which started flying in June 2014, offers scheduled air passenger transport, air cargo transport, and charter flight services in the country. It does not have international operations.
In a move that will consolidate the Indian airline industry, AirAsia Aviation Group Ltd (formerly known as AirAsia Investment Ltd (AAAGL), on Wednesday (November 2) said it has sold the remaining 16.33 percent stake in AirAsia India (AAI) to Air India Ltd.
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AAAGL is a wholly-owned subsidiary of Capital A Bhd (formerly known as AirAsia Group Berhad).
"Following the announcements made on December 29, 2020, and January 5, 2021, on the disposal of 32.67 percent equity shares in AAI with AAAGL receiving $37,660,000 in gross proceeds, the company announced the disposal of the remaining 16.33 percent equity shares in AirAsia to Air India Limited, an affiliate of Tata Sons Private Ltd," according to a regulatory filing.
"All customary consents and regulatory approvals have been secured. AAAGL is expected to receive Rs 1,556,487,800 (equivalent to $18.83 million) in gross proceeds. There will be no gain or loss on the disposal as Capital A has marked the remaining 16.33% in AAI to its fair value," AirAsia Aviation Group said.
Also, during the course of the operations of the joint venture, AAI received certain notices from the tax authorities in India. The company has said it will, along with its affiliates, continue to cooperate with AAI in contesting these notices.
Further, the disposal will not have any effect on Capital A share capital and substantial shareholders’ shareholding, and is not expected to have any material effect on the earnings per share, net assets per share as well as the gearing in the company for the financial year ending December 31, 2022, the company said.
The cash balance of AAAGL will increase by the same amount after this disposal exercise.
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"After the transaction closes, AAAGL will not hold any equity interest in AAI and the brand license and technical services agreement between AirAsia Berhad and AAI will be terminated after 12 months from the date of termination of the shareholders agreement between the parties or at an earlier date as may be intimated by AAI," the AirAsia Aviation Group added.
AirAsia India currently flies to 18 destinations with a market share of 5.9 percent. AirAsia India, which started flying in June 2014, offers scheduled air passenger transport, air cargo transport, and charter flight services in the country. It does not have international operations.
AirAsia India is majority-owned by Tata Sons Private Ltd with a shareholding of 83.67 percent and the remaining stake is with AAIL, which is part of Malaysia's AirAsia Group.
Full-service carrier Air India and its low-cost subsidiary Air India Express were acquired by Talace Private Ltd, a wholly-owned subsidiary of Tata Sons Private Ltd, last year. Besides, the Tatas operate the full-service airline Vistara in a joint venture with Singapore Airlines.
The Tatas took over Air India and Air India Express in January this year. In October 2021, Tatas emerged as the winning bidder for loss-making Air India. It offered a bid of Rs 18,000 crore, comprising a cash payment of Rs 2,700 crore and taking over the carrier's debt worth Rs 15,300 crore.
(Edited by : Shoma Bhattacharjee)
First Published: Nov 2, 2022 6:28 PM IST
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