In a big development, AirAsia Aviation Group Limited on Wednesday announced that it has entered into a share purchase agreement to sell the remaining equity shares held in low-cost carrier AirAsia (India) to Tata Group-owned Air India. The agreement came after AirAsia reviewed its strategic goals in a bid to narrow its focus on ASEAN.
“All customary consents and regulatory approvals have been secured. AAAGL is expected to receive Rs 1,556,487,800 (equivalent to USD 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 per cent in AAI to its fair value,” the company said in a statement.
#BREAKING | Air Asia sells its India stake to Tata.— Republic (@republic) November 2, 2022
Tune in - https://t.co/GAtGCw2GdU pic.twitter.com/RONTF8qnrA
AirAsia India was the fifth-largest airline in India, with a total market share of 5.7 per cent. Now with the takeover by Tata-led Air India, the entity will have a combined 15.7 per cent share of the country's domestic passenger market.
Earlier in June this year, the Competition Commission of India (CCI) approved the acquisition of the entire shareholding in AirAsia India by Air India, a wholly-owned subsidiary of Tata Sons. Notably, in April, Air India proposed to acquire a 100 per cent stake in AirAsia India.
The TATA-owned Air India earlier had an 83.67 per cent stake in the airlines while the remaining 16.44 per cent was with AirAsia Investment Ltd (AAIL), which is part of Malaysia's AirAsia Group.
CCI approves acquisition of entire shareholding in Air Asia India by Air India, a wholly-owned subsidiary of Tata Sons pic.twitter.com/TqUE8kFiYC— CCI (@CCI_India) June 14, 2022
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 Rs18,000 crore, comprising a cash payment of Rs 2,700 crore and taking over the carrier’s debt worth Rs 15,300 crore. Besides this, Tatas also operates the full-service airline Vistara in a joint venture with Singapore Airlines.