Tatas to take over 76% stake in AirAsia

Tatas are likely to integrate AirAsia with its low-cost subsidiary, Air India Express by potentially converting the debentures into equity at a later stage.

Tata Sons is planning to take over more than 76% stake in AirAsia India by the end of 2020-2, the Business Standard newspaper reported on Monday. AirAsia India is currently functioning on funding from Tata Sons, which has invested Rs 650 crore through optionally convertible debentures. 
However, AirAsia Berhad holds 49% stake in the company and Tata Sons acquiring the airline, will provide an exit route to Malaysia's flagship budget carrier. The AirAsia group also recently said it was reviewing its investment in the joint venture, as operations of the company have been draining cash and adding to the group's financial stress. AirAsia India has never made profits in any year ever since its inception. 

Tatas are likely to integrate AirAsia with its low-cost subsidiary, Air India Express by potentially converting the debentures into equity at a later stage. This will also reduce the stake of AirAsia Berhad. 

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Even though there has been no official statement by either but internally, the Tata Group has initiated discussions on rebranding the airline with two names being contemplated, Tata Airline or Tata Express. Displaying a Tata brand name, the airline might start capitalising more, which it has been unable to do till now due to presence of the AirAsia group.  

The airline is also set to have its own website from February, which is being built by US-based travel technology company Navitaire. 
 

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