Tata Sons buy additional 32.67% stake in Air Asia in preparation to buy Air India

ata Group buying AirIndia

The Tata group has already submitted an application to purchase Air India. The transaction advisor will inform the applicants by 6 January whether the submitted application is considered eligible or not. Eligible candidate will then be asked to submit a financial tender.

To strengthen its position, the Tata group increased its stake in Air Asia India from 51 percent to 83.67 percent with approximately Rs 280 crore. As Air Asia Berhad has less than 18 per cent stake in Air Asia India, Tata executives will also have the opportunity to ‘rebrand’ it.

A few months ago, Credit Suisse submitted a report quoting Tony Fernandez, Chief Executive of Air Asia. Malaysia’s cheap airline Air Asia Berhad has become in the marginal market in India and Japan. And they can leave their joint venture with Tata in their joint venture Air Asia India. On Tuesday, both parties said the deal was “acceptable.”

In 1932, Tata Airlines was renamed Air India after its nationalization. After the Indian Government was put Air India has been on the table for sale ever since, speculation began that the Tata group might bring it back home. Experts say that the Tata group does not want any shortage. However, despite accumulating interest, Tata plans to acquire ‘Maharaja’ through its two existing airlines, AirAsia India and Vistara.

According to sources, the Tata Sons has already started talking about returning Air Asia the 6 aircraft on lease from Air Asia Berhad. However, the president of the company, Chandrasekaran, said that the airline’s business would be solid and that there would be no more than one airline. Since Air India is a full-service airline, it will expand. Because, Vistara is also a full-service career. We hope that our partner (Singapore Airlines) is willing to participate in this future plan with Air India.

Air India, whatever it is in the end, will have to pay Rs 23,286 crore out of the company’s total Rs 60,000 crore. Remaining will be handed over to Special Purpose Vehicle Air India Assets Holding. The Center will do decentralization based on the enterprise value of Air India. The Center will do so based on the business value of Air India’s delineation. That is, Air India’s market value, short-term and long-term debt and balance sheet will be determined as the company’s cash value.

However, it is not yet known whether Vistara will be with TATA GROUP in the purchase of his fellow Singapore Airlines ‘Maharaja’. Vistara has started negotiations with his partner Singapore Airlines to waive the ‘non-competitive’ clause in the agreement. Under the Singapore Airlines agreement with Tata Sons, the extension is the exclusive right to operate all ‘full-service carrier’ services as part of the Tata Group. Therefore, experts claim that if the Tata group submits a tender for Air India, the Tata group is negotiating with Singapore Airlines to waive the respective clause of the agreement.

Also, if Vistara bids for Air India, it will need approval from Singapore Airlines and Temasek. Temasek has a 55 percent stake in Singapore Airlines. Temasek has already expressed its apprehension in the Tata Group’s proposed tender to buy Air India, which is running at a loss