Tata Sons and Singapore Airlines (SIA) have agreed to merge Air India and Vistara by March 2024, subject to regulatory approvals. SIA is investing Rs 2,059 crore in Air India and will get 25.1% stake in the company with significant presence in all the major market segments.
Tata group owns a 51 per cent stake in Vistara, and the remaining 49 per cent shareholding is with Singapore Airlines (SIA).
SIA plans to fully fund this investment with internal cash resources, which was at $17.5 billion on September 30, 2022. Both companies also agreed to participate in additional capital injections, if the need be, to fund the growth and operations of the enlarged Air India in Financial year 2023 and 2024. Based on the stakes that SIA will own post-completion, the share of any additional capital injection would be up to Rs 5,020 crore that will be payable only after the merger is completed.
A 51:49 joint venture between Tata Sons and Singapore Airlines Limited, Vistara was established in 2013 and is a leading full-service carrier with international operations in Asia, Europe and Middle East.
Once the consolidation of Air India and Vistara is done, Air India will be India's leading domestic and international carrier. It will have a combined fleet of 218 aircrafts making it the country's largest international and domestic carrier.
Mr. N Chandrasekaran, Chairman, Tata Sons said, "As part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer position, enhancing safety, reliability, and on-time performance."
Mr. Goh Choon Phong, Chief Executive Officer, Singapore Airline, said," We will work together to support Air India's transformation program, unlock its significant potential, and restore it to its position as a leading airline on the global stage."
Official release |
