Singapore Airlines to pump $380 million more in Air India
After the merger, SIA will hold a 25.1% stake in Air India and gain presence in India’s aviation market across domestic, international, full-service, and budget segments
Singapore Airlines (SIA) will invest an additional ?3,194.5 crore (about $380 million, or Singaporean $498 million) in Tata group-owned Air India, as the long-awaited merger with Vistara completes on Monday, the company said in a statement. After the completion of the merger, SIA will hold a 25.1% stake in the newly unified Air India.
The Singaporean airline’s consideration for the merger includes its 49% stake in Vistara and an upfront ?2,058.5 crore cash infusion, which forms part of the ?3,194.5 crore investment, in exchange for a 25.1% equity stake in Air India.
SIA and Tata Sons announced the merger in November 2022, agreeing that SIA will contribute up to ?5,020 crore (S$880 million at the time) to cover its share of Tata’s prior funding for Air India, including related costs. This ensures SIA retains a 25.1% stake in Air India.
After the merger is completed, the group expects to report a gain of about Singaporean $1.1 billion (about $830 million)and will begin including its share of Air India’s financial performance in its records.
The megrer will help SIA gain presence in India’s aviation market across domestic, international, full-service, and budget segments, the company said in the statement.
“SIA’s additional capital injection is expected to be Rs31,945 million (equivalent to S$498 million), based on Tata’s funding to Air India to-date. This will occur after the completion of the merger and within November, through subscription to new Air India shares. Future capital injections will be considered based on Air India’s requirements and available funding options,” the company statement read.
Air India will be India’s only full-service airline post-merger.
The expanded codeshare agreement between SIA and Air India now includes 11 Indian cities and 40 international destinations.
Sign up to our daily newsletter for more updates!