New Delhi: The partnership between AirAsia, the Tatas and the Arun Bhatia family is set to be a long-term one. The three-way joint venture agreement to run low-fare air services in India will bind all the entities under an exclusivity clause that bars them from relinquishing their shareholding to any other entity including forging an alliance with a domestic airline company during the term of the joint venture.
However, the terms of the agreement allows Tata Sons and the Bhatias-owned Telestra Tradeplace freedom to pick up 5% equity capital of any airline if the investments are made jointly without getting any management control in the target company.
“During the term of this Memorandum of Agreement, AirAsia Berhad, AirAsia India Ltd and their affiliates shall not directly or indirectly initiate, assist, solicit, negotiate or accept any offer or inquiry from any person regarding an investment, partnership, participation, association, brand licensing with any person in India engaged in the business,” the exclusivity clause in the memorandum of agreement, as reviewed by FE, states.
25/02/13 Subhash Narayan/Debabrata Das/Financial Express
