Tata Sons will increase its stake in budget carrier AirAsia India (AAI) to 83.67 per cent by acquiring an additional 32.67 per cent for USD 37.66 million from AirAsia Investment Ltd (AAIL), according to a regulatory filing.
Currently, AAIL, which is a wholly-owned subsidiary of Malaysia-based AirAsia, holds 49 per cent stake in the Bengaluru-based AirAsia India.
In a regulatory filing to stock exchange Bursa Malaysia, AirAsia said, "The board of directors of AirAsia wishes to announce that its wholly-owned subsidiary AAIL and Tata Sons Pvt Ltd, India, on December 29, entered into a share purchase agreement." It added that the pact is for disposing of AAIL's equity interest of 32.67 per cent in AirAsia India to Tata Sons "for a total consideration sum of USD 37,660,000 (or MYR 152.58 million)".
AirAsia India started operations on domestic routes in June 2014 following the then UPA government allowing foreign airlines to invest up to 49 per cent in the Indian carriers.
"The share of losses over the years has resulted in the carrying value of the investment at the date of transaction to be Nil," AAIL said in the filing.
It added that the proposed disposal will, therefore, result in a gain on disposal of USD 37,660,000 (equivalent to about 152.58 million Malaysian ringgit) in the fourth quarter of 2020 at both AAIL and consolidated group level.
The directors of AirAsia also wishes to announce that AAIL has further agreed to waive off unpaid brand licence fees payable by AAI to AirAsia Berhad, a company's wholly-owned subsidiary, under an agreement reached in December last year, due to the COVID-19 pandemic, it said.