Tata Group will create a stir in the aviation sector, Singapore Airlines will invest Rs 3,195 crore in Air India.
aviation sector Tata Group is strengthening its hold in Kostar. After including Air India in its fleet, the market share of Tata Group has increased rapidly. Now Singapore Airlines will invest an additional Rs 3,194.5 crore in Tata Group-owned Air India after the merger with Vistara in November. This will help the group to expand its reach. This merger agreement was announced on November 29, 2022 and is going to be completed on November 11, 2024. Due to this merger, Singapore Airlines will have 25.1 percent stake in the expanded Air India. Vistara started operating flights on January 9, 2015.
49 percent stake of Singapore Airlines
Singapore Airlines has a 49 percent stake in this joint venture established with the Tata Group. Singapore Airlines (SIA) Group on Friday said its consideration for the merger includes Rs 2,058 crore in cash in exchange for a 49 per cent stake in Vistara and a 25.1 per cent equity stake in the expanded Air India. Following completion of the merger, SIA is expected to recognize a non-cash accounting gain of approximately S$1.1 billion and begin equity accounting for its share in Air India’s financial results. According to the release issued on Friday, the merger includes an agreement for SIA to contribute its share in any funding previously provided by Tata before the completion of the merger. It also has funding cost of up to Rs 5,020 crore which will allow it to retain 25.1 per cent stake in Air India.
Share in domestic and international flights will increase
“SIA’s additional capital investment is expected to be Rs 3,194.5 crore, based on the financing provided by Tata to Air India so far. This will be through subscription of new Air India shares after the completion of the merger and within November 2024. “Future capital investment will be considered depending on the needs of Air India and the available financing options to accelerate the merger of Vistara,” according to the release announcing the airline’s financial performance for the six months ending September 2024. SIA will mark a major integration into the growing Indian aviation sector. SIA said the merger will result in a significant presence in all major Indian air travel sectors, including domestic, international, full-service and low-cost operations.
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