AirAsia India set to spread wings in aviation sector

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By Ashish Mitra --
Monday, 25 Jan, 2021

With Tata Sons Ltd. acquiring an additional 32.67 per cent stake in AirAsia India from its Malaysian joint venture partner, AirAsia Bhd, for $37.6 million, looks like the Tata Group is spreading wings in India’s aviation sector. It has earlier bid for Air India. This takes the Tatas’ stake in the venture to 83.6 per cent. There will be a call option for the balance 16.33 per cent stake in AirAsia exercisable by Tata Sons at any time after the transaction is done.

In addition, there will be a put option exercisable by AirAsia in two tranches, with the first exercisable from March 1 to May 30, 2022, and the second from October 1 to December 31, 2022.

According to regulatory filings by AirAsia Bhd, the total consideration in respect of the options granted for its remaining 16.33 per cent stake shall be $18.8 million.

AirAsia said the move is aimed at stopping cash burn at a time when its global operations have been hit hard by the Covid-19 pandemic. The company said that since India is a non-core market, the transaction will allow it to concentrate on recovery in its key Asean markets of Malaysia, Thailand, Indonesia and the Philippines.

AirAsia India set to spread wings in aviation sector. With Tata Sons Ltd. acquiring an additional 32.67 per cent stake in AirAsia India from its Malaysian joint venture partner, AirAsia Bhd, for $37.6 million, looks like the Tata Group is spreading wings in India’s aviation sector. It has earlier bid for Air India. This takes the Tatas’ stake in the venture to 83.6 per cent. There will be a call option for the balance 16.33 per cent stake in AirAsia exercisable by Tata Sons at any time after the transaction is done.

In addition, there will be a put option exercisable by AirAsia in two tranches, with the first exercisable from March 1 to May 30, 2022, and the second from October 1 to December 31, 2022.

According to regulatory filings by AirAsia Bhd, the total consideration in respect of the options granted for its remaining 16.33 per cent stake shall be $18.8 million.

AirAsia said the move is aimed at stopping cash burn at a time when its global operations have been hit hard by the Covid-19 pandemic. The company said that since India is a non-core market, the transaction will allow it to concentrate on recovery in its key Asean markets of Malaysia, Thailand, Indonesia and the Philippines.