NEW DELHI: Tata Sons is increasing its stake in AirAsia India to 49%, buying 7.94% of shares held by Arun Bhatia-controlled Telestra Tradeplace. An additional 2% of Bhatia’s shares are being acquired by Tata Group executives and airline board members S Ramadorai and R Venkataramanan.
The share sale, expected to be completed next month, will result in Bhatia exiting the airline completely and Tatas and their executives holding 51% in the airline. AirAsia Malaysia will retain its 49% in the airline. AirAsia began operations in June 2014 as a tripartite joint venture (JV) between Tatas, AirAsia Malaysia and Bhatia.
The airline’s first eighteen months have been marked by an ugly spat between Bhatia and the airline’s Malaysian partners. Bhatia did not participate in last round of fund raising in 2015 which saw his stake being reduced to 10% and accused AirAsia’s Group CEO Tony Fernandes of remote-controlling the airline, a charge denied by both Tatas and Fernandes. The transaction is expected to pave the way for long delayed fund infusion in the airline.
In a statement Tata Sons said it has entered into an agreement with Air Asia (India) Limited and Telestra Tradeplace Private Limited for the stake purchase. AirAsia India chairperson S. Ramadorai and Mr. R. Venkataramanan, in their individual capacity, propose to acquire 0.5% and 1.5% shareholding respectively of Telestra’s remaining 2% equity stake in the company. AirAsia Investment Ltd. will continue to hold its 49% stake in the company. The agreement was entered into on March 14, 2016, and the transaction is proposed to be completed in April, 2016, subject to completion of the relevant corporate approvals and processes, it said.
