AirAsia Sells 32.67% In India JV For RM153mil

KUALA LUMPUR: AirAsia Group Bhd is selling a 32.67% stake in loss-making AirAsia (India) Ltd or AAI to Tata Sons Private Ltd, India (TSL) for US$37.66mil (RM152.58mil) cash.

AAI is a 51:49 joint venture between TSL and AirAsia Group’s wholly owned subsidiary AirAsia Investment Ltd (AAIL), respectively.

The low-cost carrier told Bursa Malaysia that the deal involved a call option regarding AAIL’s remaining 16.33% stake in AAI, exercisable by TSL at any time after the deal is completed.

In addition, there is a put option exercisable by AAIL in two tranches, with the first tranche being exercisable from March 1,2022 until May 30,2022, and the second tranche being exercisable from Oct 1,2022 to Dec 31,2022.

The total value of options for AAIL’s remaining 16.33% stake is US$18.83mil (RM76.29mil).

The deal is expected to be completed by end-March 2021, and the cash received will be utilised as working capital.

Also, AAIL will waive off unpaid brand licence fees payable by AAI to AirAsia Bhd, under the brand licence and technical services agreement dated Dec 30,2019, due to the Covid-19 pandemic.

AirAsia Group said the deal would reduce cash burn in the short term and allow it to concentrate on the recovery of its key Asean markets in Malaysia, Thailand, Indonesia and the Philippines in the long run.

It also explained that India is a non-core market for AirAsia (being a non-Asean country), and the group would continue to regularly re-assess its business strategies and dispose of non-core investments to improve its liquidity.

Source: The Star