Tata Sons may raise AirAsia India stake to 51% — report

This article first appeared in The Edge Financial Daily, on September 7, 2018.
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KUALA LUMPUR: Tata Sons may emerge as the controlling shareholder in AirAsia India by increasing its stake from 49% to 51% as part of the budget airline’s clean-up and consolidation, The Times of India reported yesterday.

The Times of India, quoting people directly aware of the matter, reported that Tata Sons may be buying stakes owned by the airline’s chairman S Ramadorai and non-executive director R Venkataramanan.

“The proposed stake buy will tighten Tata Sons’ grip over the four-year-old AirAsia India and will reaffirm its commitment to the aviation business,” The Times of India reported.

It said Ramadorai and Venkataramanan currently own 0.5% and 1.5% stakes respectively in AirAsia India, while AirAsia Group Bhd has 49%.

It also reported that Tata Sons’ board had discussed buying Ramadorai and Venkataramanan’s AirAsia India stakes but there is no deadline to close the transaction.

A Tata Sons spokesman declined to comment to The Times of India on the story, while Ramadorai and Venkataramanan did not respond to text messages and emails.

AirAsia India, which started operations in India in mid-2014, began as a three-way joint venture (JV) among Tata Sons (with a 41.06% stake then), AirAsia Group (49%) and Arun Bhatia (9.94%). But Bhatia exited the JV and his stake was split and sold to Tata Sons, Ramadorai and Venkataramanan.

At the time of this report, AirAsia Group has not issued a statement in response to The Times of India’s article.