Tata Sons to increase stake in AirAsia India to 49%
28 March 2016
Tata Sons, the holding company of Tata group companies, will acquire an additional 7.94 per cent equity stake in Air Asia India from Telestra, to raise its stake in to 49 per cent from the existing 41.06 per cent.
Arun Bhatia's Telestra Tradeplace holds nearly 10 per cent stake in the low-cost airline in which Malaysia-based Air Asia holds 49 per cent equity, as permitted under foreign direct investment regulations.
While Tata Sons would buy 7.94 per cent shareholding, the remaining stake would be purchased by the carrier's two directors - S Ramadorai (chairman) and R Venkataramanan, in their individual capacity.
Tata Group said it has entered into an agreement with Air Asia India, Telestra Tradeplace and two of the directors of the company under which Tata Sons will acquire 7.94 per cent equity stake from Telestra while the two directors, in their individual capacity, will acquire 0.5 per cent and 1.5 per cent shareholding, respectively, of Telestra's remaining 2 per cent equity stake in the company.
AirAsia Berhad will continue to hold its 49 per cent stake in the company. The agreement was entered into on 14 March 2016, and the transaction is proposed to be completed in April 2016, subject to completion of the relevant corporate approvals and processes.
The latest development comes against the backdrop of Arun Bhatia expressing unhappiness over the state of affairs at budget carrier. Besides, there have been concerns in certain quarters about control and ownership at the airline.
Last month, the airline had appointed Amar Abrol as CEO replacing Mittu Chandilya.
The deal is expected to be completed next month, subject to relevant corporate approvals and processes, the release added.