Tuesday, November 24, 2020

Tata group poised to infuse $50 million into AirAsia India JV

New Delhi: Tata Sons, which owns a 51 per cent stake in AirAsia India, is poised to infuse around $50 million as an emergency finding in the loss-making carrier to keep it flying. Last week, Malaysian carrier AirAsia said it was reviewing its India operations run in partnership with Tata Sons indicating a possible exit from the world’s fifth-largest economy. Plus, the embattled Malaysian budget carrier mentioned that the India operations have been draining cash, adding to its financial difficulties aggravated by the pandemic-related disruptions on global travel.

Last month, AirAsia shut operations in Japan citing tough high challenging operating conditions. Earlier several news reports surfaced that Tata Sons’ parent was in talks to buy AirAsia Group’s stake.

Tata Sons' latest capital infusion would be done through a mix of debt and equity could see the Tata group’s stake in Air Asia India grow beyond the existing 51 per cent, two people with knowledge of the matter told Mint on condition of anonymity. The $113 billion salt-to-software conglomerate will remain invested in AirAsia India, and it may find an appropriate partner to invest in the carrier in the future, the business daily quoted one of the two people aware of the matter as saying.

He went on add that the Tatas is of the view that the aviation sector in the country will bounce back strongly in the medium term and that there is adequate space in the market for a domestic no-frills airline.

24/11/20 ETNowNews.com

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