2024 TARGET FOR AIR INDIA AND VISTARA MERGER
NEW DELHI: Singapore Airlines Ltd (SIA) said on Tuesday it would emerge as a 25.1% owner of Air India as part of a deal that would merge its Vistara full-service airline joint venture with Tata Sons into India’s national carrier.
SIA will invest $250 million into Air India as part of the transaction, the Singaporean carrier said in a statement, with the pair aiming to complete the merger by March 2024 subject to regulatory approvals.
NEW DELHI: In a major consolidation in the Indian aviation space, Tata group on Tuesday announced the merger of Vistara with Air India, and pursuant to the deal, Singapore Airlines will have a 25.1% stake in Air India.
The proposed deal is expected to be complete by March 2024, subject to regulatory approvals.
Tata group owns a 51% stake in Vistara and the rest is with Singapore Airlines (SIA).
In a release, SIA said Vistara and Air India would be merged, and it would also be investing ₹2,058.5 crore in Air India as part of the transaction.
“This would give SIA a 25.1% stake in an enlarged Air India group with a significant presence in all key market segments.
SIA said it intends to fully fund this investment with its internal cash resources, which stood at 17.5 billion Singapore dollars as of September 30.
In a separate release, Tata group said that with the consolidation, Air India would be the country’s leading domestic and international carrier with a combined fleet of 218 aircraft, “making it India’s largest international carrier and second largest domestic carrier”.
SIA and Tata Sons have also agreed to participate in additional capital injections, if required, to fund the growth and operations of the enlarged Air India in FY2022-23 and FY2023-24. “Based on SIA’s 25.1% stake post-completion, its share of any additional capital injection could be up to ₹50,200 million (S$ 880 million, US$ 615 million), payable only after the completion of the merger,” SIA said in the release.
The actual amount will depend on factors, including the progress of the enlarged Air India’s business plan, and its access to other funding options. SIA intends to fully fund any additional capital injections with its internal cash resources, it added.