By: Business Desk
News18.com
Last Updated: August 24, 2022, 11:20 IST
New Delhi, India
AirAsia India is a joint venture with Malaysia's AirAsia, which has 16.33 per cent of the shareholding. (Image for representation: Twitter/AirAsia)
Tata Sons may have to make a Rs 2,600-crore provision as accumulated losses for AirAsia India, according to a media report. It said an auditor’s report has said AirAsia India’s net worth has been fully eroded and its liabilities exceed current assets. It has indicated against AirAsia India as a “going concern”. Air India has proposed to acquire the entire stake in no-frills carrier AirAsia India. It has also got approval from the Competition Commission of India for the proposed deal.
Already reeling under losses, AirAsia India was further hit by the coronavirus pandemic. The ET report, quoting officials, said no decision has been taken on whether the write-off will be included in the balance sheet of Tata Sons or Air India.
Currently, Tata Sons holds 83.67 per cent of the equity share capital of Air Asia India, and the rest is held by AirAsia Investment Ltd (AAIL), which is part of Malaysia’s AirAsia Group.
“The proposed combination envisages the acquisition of the entire equity share capital of AirAsia (India) Private Limited (Air Asia India) by Air India Ltd. (AIL), an indirect wholly-owned subsidiary of TSPL (Tata Sons Pvt Ltd). At present, TSPL holds 83.67 per cent of the equity share capital of Air Asia India,” the competition regulator has said.
Deals beyond a certain threshold require competition watchdog CCI’s approval. AirAsia India, which started flying in June 2014, offers scheduled air passenger transport, air cargo transport and charter flight services in the country.
Air Asia India is a joint venture between Air India Investment Limited (AAIL) and TSPL. TSPL currently holding 83.67 per cent and AAIL holding 16.33 per cent of the shareholding.
Tatas also took over Air India and Air India Express in January this year. The Tata group in October 2021 emerged as the winning bidder for loss-making Air India. It offered a bid of Rs 18,000 crore, comprising cash payment of Rs 2,700 crore and taking over the carrier’s debt worth Rs 15,300 crore. In January, the Tata group regained ownership of Air India.
Both AirAsia and Air India are run by the Tata group. Air India is a wholly-owned subsidiary of Tata group, while AirAsia India is its joint venture with Malaysia’s AirAsia, which has 16.33 per cent of the shareholding. Apart from this, the Tata group also operates full-service carrier Vistara in a joint venture with Singapore Airlines.
AirAsia India in December 2021 informed that it has paid all its dues to the Airports Authority of India (AAI) and the airline was making all payments as per credit terms on due dates from September 2021. AirAsia India’s dues to the AAI increased from Rs 1.47 crore in January 2020 to Rs 3.58 crore in October 2021, as per AAI’s internal documents.
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