Tata Sons has increased its holding in AirAsia India (Bengaluru International) to 83.67% after it acquired an additional 32.67% stake from joint-venture partner AirAsia Group for a total consideration of USD37.66 million.
AirAsia Group said in a stock market filing its wholly-owned subsidiary AirAsia Investment Limited (AAIL) will retain a minority stake of 16.33% in AirAsia India.
"AirAsia Group has been reviewing its forward business strategy regularly, including its investment in AAI. This transaction will ensure strict cost containment for AirAsia Group in the short term, and strengthen our presence in ASEAN while continuing our market dominance for travel from ASEAN to India and North Asia. India will remain an important market for AirAsia. Tata Sons has been an excellent partner and we look forward to continuing working closely together in other areas of growth," AirAsia Group President (Airlines) Bo Lingam said.
Lingam added that the partial divestment from its non-core Indian unit will allow the group to focus on "core markets in ASEAN, particularly in Malaysia, Thailand, Indonesia, and the Philippines, as well as for our future expansion into Cambodia, Myanmar and Vietnam".
The partial divestment in India follows on from a decision in October to close AirAsia Japan (Nagoya Chubu).
AirAsia has also agreed to waive off unpaid brand license fees payable by AirAsia India to AirAsia Berhad, a wholly-owned subsidiary of the group, due to the COVID-19 pandemic.
India's Moneycontrol reported that Tata Sons was likely to use AirAsia India as a vehicle for their bid for Air India (AI, Delhi International) and Air India Express (IX, Delhi International). The deadline for sealed bids passed on December 29. Earlier reports said the only rival to Tata Sons for control of the flag carrier is a group of employees backed by Interups AI, a US-based fund run by non-resident Indians.
Tata Sons reportedly plans to gradually disentangle AirAsia India from the South-Eastern Asian group and is in the process of setting up a separate website. The Indian conglomerate also owns a 51% stake in Vistara (Delhi International), a joint-venture with Singapore Airlines Group.
