2024 target for Air India and Vistara merger

SINGAPORE AIRLINES, WHICH OWNS 49% OF FULL-SERVICE CARRIER VISTARA, WILL GET A 25.1% STAKE IN THE MERGED CARRIER FOR A PAYMENT OF ₹2,058.5 CRORE IN CASH

The Tata group will merge Air India and Vistara, with partner Singapore Airlines holding 25.1% of the merged entity, creating an airline that could potentially challenge market leader Indigo.

Singapore Airlines, which owns 49% of full-service carrier Vistara, will get a 25.1% stake in the merged carrier for a payment of ₹2,058.5 crore in cash, according to an exchange filing on Tuesday. The Tata group will own the remaining 74.9%.

According to the agreement, Singapore Airlines’ 49% interest in Vistara will translate into approximately 20.6% of Air India after the merger. Singapore Airlines will pay cash at the time of completion of the merger to acquire an additional 4.5% stake. Under the Companies Act, a shareholder must hold more than 25% to be able to block a special resolution, which requires at least a 75% vote to pass. Singapore Airlines has also agreed to invest up to ₹5,020 crore for the various plans.