Will Tata Group acquire AirAsia's 49% stake amid lockdown?
Reportedly Malaysian carrier AirAsia has reportedly reduced the price for its 49 percent stake in AirAsia india its share of the airline joint venture with Tata Group to $50 million due to losses incurred amid the ongoing Covid-19 pandemic. According to a report published in business Standard, the Tata Group is in advanced talks with to acquire 49 percent state-owned AirAsia Group in the indian joint venture (JV), AirAsia India.
Meanwhile AirAsia's decision to reduce the price of its stake, as per the report, comes at a time when the financial health of AirAsia Group Berhad and AirAsia india declined sharply due to the coronavirus pandemic. A source told the newspaper that the falling airline valuations have brought down the expectations of the Malaysian company, which is now looking to exit the india joint venture with Tata.
The report added that the threat of action by indian investigation agencies against AirAsia india and its promoter Tony Fernandes could be another reason why AirAsia Group wants to exit India. Tata Group, on the other hand, is reportedly seeking to expedite the process of acquiring AirAsia Group's stake in the loss-making airline joint venture before the deadline of air India’s disinvestment expires at the end of august, as per the report. Moreover a final decision on the toned-down offer to acquire AirAsia india will be taken in august, added the report. The financial situation of AirAsia india has worsened after it reported a loss in the march quarter and its net worth has also turned negative.
Meanwhile AirAsia's decision to reduce the price of its stake, as per the report, comes at a time when the financial health of AirAsia Group Berhad and AirAsia india declined sharply due to the coronavirus pandemic. A source told the newspaper that the falling airline valuations have brought down the expectations of the Malaysian company, which is now looking to exit the india joint venture with Tata.
The report added that the threat of action by indian investigation agencies against AirAsia india and its promoter Tony Fernandes could be another reason why AirAsia Group wants to exit India. Tata Group, on the other hand, is reportedly seeking to expedite the process of acquiring AirAsia Group's stake in the loss-making airline joint venture before the deadline of air India’s disinvestment expires at the end of august, as per the report. Moreover a final decision on the toned-down offer to acquire AirAsia india will be taken in august, added the report. The financial situation of AirAsia india has worsened after it reported a loss in the march quarter and its net worth has also turned negative.