Singapore Airlines (SIA) said it has received approval from the Indian government for foreign direct investment (FDI), as part of a merger in which Vistara, its 49%-owned JV with Tata, will be absorbed into Air India.
- Read this at SGinvestors.io -
Expects the deal to be completed by end-2024
The FDI approval, together with anti-trust and merger control clearances, as well as other governmental and regulatory approvals received to date will clear a significant hurdle towards the completion of the deal.
The parties are in discussions to extend the Long Stop Date (previously indicated as 31 Oct 2024) to accommodate the latest expected transaction completion date.
- Read this at SGinvestors.io -
But more investment may be required
SIA will swap its 49% stake in Vistara and inject a further INR20,585m (US$247m) in return for a 25.1% direct stake in the enlarged entity. SIA and Tata Sons have also agreed to participate in an additional capital-injection exercise into the enlarged Air India after the completion of the merger, to fund the growth and operations of the enlarged Air India. The capital injections will be on a pro-rata basis.
SIA’s pro-rata share of 25.1% of the additional capital injection would be up to INR50,200m (US$600m), based on its current agreement with Tata Sons.
Regional competition is catching up rapidly
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
