Singapore Airlines is set to invest additional funds of Rs 3,194.5 crore in Air India after the merger of Vistara in November. The carrier will infuse the amount in the Tata Group-owned airline.
The merger will be completed on November 11, 2024 and will end up in Singapore Airlines controlling a 25.1 per cent stake in the enlarged Air India, reported PTI. The deal was announced earlier on November 29, 2022.
Vistara is a joint venture between Tatas and Singapore Airlines, with the latter controlling a 49 per cent share in the carrier. Considering the merger, Singapore Airlines (SIA) Group on Friday said that the deal includes 49 per cent interest in Vistara and Rs 2,058.5 crore in cash in exchange for a 25.1 per cent share in the new entity.
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After the merger, the company said that it expects to recognise a non-cash accounting gain of nearly 1.1 billion Singapore dollars.
The official release noted that the deal includes an agreement for SIA to contribute any share of the funding previously shared by Tata ahead of merger completion, along with relevant funding costs up to Rs 5,020 crore that would permit it to maintain 25.1 per cent stake in Air India.
The funding will take place post merger completion and in November 2024 via subscription to the new Air India shares. The release further noted that additional capital infusions in the future will be considered on the basis of Air India’s requirement and available funding options.
Recently, both SIA and Air India also agreed to majorly expand their codeshare agreement, adding 11 Indian cities and another 40 global destinations to their network. The merger will also mark a major consolidation in the rapidly growing domestic aviation market.
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