The Singaporean carrier said in a statement that it would emerge as a 25.1% owner of Air India, as part of a deal that would merge its Vistara joint venture with Tata Sons, into Air India.
As part of the transaction, SIA will invest $250 million into Air India, Singapore Airlines said, with the pair aiming to complete the merger by March 2024 subject to regulatory approvals.
Singapore Airlines and Tata have also agreed to participate in additional capital injections, if required, to fund the growth and operations of the enlarged Air India in FY2022-23 and FY2023-24.
Based on SIA’s 25.1% stake post-completion, its share of any additional capital injection could be up to ₹50,200 million, payable only after the completion of the merger.
The actual amount will depend on factors including the progress of the enlarged Air India’s business plan, and its access to other funding options. SIA intends to fully fund any additional capital injections with its internal cash resources, the statement said.
Through this transaction, SIA will reinforce its partnership with Tata and immediately acquire a strategic stake in an entity that is four to five times larger in scale compared to Vistara.
The merger would bolster SIA’s presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in a large and fast-growing aviation market.
Goh Choon Phong, Chief Executive Officer, Singapore Airlines, said, “Tata Sons is one of the most established and respected names in India. Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time.
“With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market. We will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage."
This story has been published from a wire agency feed without modifications to the text.
