AirAsia Aviation Group Limited, the holding company of Capital A’s airline group (formerly known as AirAsia Investment — part of Malaysia’s AirAsia Group) informed the bourses on November 2 that it has sold its remaining stake in the India operations of the airline to Air India.
Following the announcements made on December 29, 2020, and January 5, 2021, on the disposal of 32.67 percent equity shares in AAI with AAAGL receiving $37,660,000 in gross proceeds, the company announced the disposal of the remaining 16.33 percent equity shares in AirAsia to Air India Limited, an affiliate of Tata Sons Private Limited.
The company in a statement said, “All customary consents and regulatory approvals have been secured. AAAGL is expected to receive Rs 1,556,487,800 (equivalent to $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% in AAI to its fair value.”
Notably, during the course of the operations of the joint venture, AAI had received certain notices from the tax authorities in India. The company has said that it will, along with its affiliates, continue to cooperate with AAI in contesting these notices.
Further, the disposal will not have any effect on Capital A share capital and substantial shareholders’ shareholding, and is not expected to have any material effect on the earnings per share, net assets per share as well as the gearing in the company for the financial year ending December 31, 2022.
Also, the cash balance of AAAGL will increase by the same amount after this disposal exercise.
After the transaction closes, AAAGL will not hold any equity interest in AAI and the brand license and technical services agreement between AirAsia Berhad and AAI will be terminated after 12 months from the date of termination of the shareholders agreement between the parties or at an earlier date as may be intimated by AAI.
Moneycontrol had earlier reported that the combined entity of Air India and AirAsia India will have a 15.7 percent share of India’s domestic passenger market and is not expected to affect the competitive landscape in the aviation market in India.
On January 27 of this year, Tata Sons purchased Air India through its wholly-owned subsidiary Talace in a deal of Rs 18,000 crore in equity and debt.
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