Air India, Indian to be merged into new co

New Delhi: As a first step towards the mega merger of Air-India and Indian, the government is likely to form the ‘new company’ within a week week. The new company, into which the two carriers shall be merged, will be registered under the under the Companies Act of 1956. Out of the two legal route envisaged by the civil aviation ministry for the merger, the government has chosen the option of forming a new company under Sections 391 and 394 of the Companies Act.
Under this route, the ministry of company affairs will pass an order on an application filed by the board of directors of the two carriers, government sources said. Additionally, the government would require the two carriers to obtain approval of creditors — “majority” in number and representing at least 75% of credit in terms of value. The other legal option that the civil aviation ministry had examined involved the central government passing an order, under Section 396 of the Companies Act, to merge the two companies in public interest.
The civil aviation ministry has chosen the first route as creditor consent issues are comparatively simpler under this option, a government source said. The first route would require the government to obtain prior approval of ‘majority’ of the creditors in numbers. These creditors should also have lent 3/4th of the total credit of Air-India and Indian.
12/03/07 Sunny Verma & G Ganapathy Subramaniam/Economic Times

To Read the News in full at Source, Click the Headline

Categories: Air India Mar 2007, indian mar 2007