KUALA LUMPUR, Nov 2 — AirAsia Aviation Group Ltd (AAAGL), the holding company of Capital A Bhd’s airline group, has entered into a share purchase agreement with Air India Ltd to sell the remaining 16.33 per cent stake held in AirAsia (India) Private Ltd (AAI) to Air India.
Air India is also an affiliate of Tata Sons Private Ltd (TSL).
In a filing with Bursa Malaysia today, Capital A said all customary consents and regulatory approvals have been secured and AAAGL is expected to receive RM89.25 million in gross proceeds.
“There will be no gain or loss on the disposal as Capital A has marked the remaining 16.33 per cent in AAI to its fair value.
“The cash balance of AAAGL will increase by the same amount after this disposal exercise,” it said.
It said the disposal will not have any effect on Capital A share capital and substantial shareholders’ shareholding and is not expected to have any material effect on the earnings per share, net assets per share as well as the gearing in the company for the financial year ending December 31, 2022.
Capital A said post-transaction, AAAGL will not hold any equity interest in AAI and the Brand License and Technical Services Agreement between AirAsia Bhd and AAI will be terminated after 12 months from the date of termination of the shareholders agreement between the parties or at an earlier date as may be intimated by AAI.
Meanwhile, in a separate statement, AAAGL said the latest agreement came as AirAsia returned to the skies stronger than ever since the pandemic which allowed the airline to re-examine its strategic objectives to focus on ASEAN given its strong network and significant presence in the region.
To date, AirAsia has flown more than 171,000 flights since January 2022, carrying over 23 million passengers across the group.
AAAGL group chief executive officer Bo Lingam said AirAsia has built a great business in India, one of the world’s biggest civil aviation markets, since it first commenced operation in 2014.
“We have had a great experience working with India’s leading Tata Group. This is not the end of our relationship but the beginning of a new one as we explore new and exciting opportunities to collaborate and enhance our synergies moving forward.
“Covid-19 has allowed us to re-examine our priorities and we felt that it was best suited for AirAsia to develop an Asean-only business, where we have four great airlines in Malaysia, Thailand, Indonesia and the Philippines with a much loved brand and presence.
“We will use the experience and knowledge we have gained from operating in the Indian domestic market to grow the Asean-Indian market in logistics and passenger services to a far greater extent,” he added.
As the fifth largest carrier in India with a total market share of 5.7 per cent and the first foreign airline to establish a subsidiary in the country, AirAsia India reported remarkable growth in 2019 with total passengers carried boosted by 39 per cent, strengthening its domestic position.
AirAsia India has flown to 13 destinations pre-pandemic, among them, Bengaluru, Kolkata, Hyderabad, New Delhi and Tiruchirappalli.
— Bernama
