AirAsia sells stake in AirAsia India for RM151.4m


AIRASIA Group Bhd disposed of 32.67% equity shares in AirAsia India Ltd via AirAsia Investment Ltd to Tata Sons Pte Ltd for US$37.66 million (RM151.39 million), which lowers its shareholding to 16.33% in the loss-making Indian unit.

“The company wishes to announce the closing of the disposal of 32.67% equity shares in AirAsia India took place on Dec 31, 2020, with the company receiving US$37.66 million in gross proceeds,” the low-cost carrier noted in its exchange filing yesterday.

In a statement recently, AirAsia Group president Bo Lingam said the transaction is in line with the group’s initiatives to reduce cash utilisation for the group and will enable it to use the cash to grow market share in core markets in Asean namely Malaysia, Thailand, Indonesia and the Philippines, including future expansions into Cambodia, Myanmar and Vietnam.

“AirAsia Group has been reviewing its forward business strategy regularly, including its investment in AirAsia India.

“This transaction will ensure strict cost containment for AirAsia Group in the short term, and strengthen our presence in Asean, while continuing our market dominance for travel from Asean to India and North Asia.

“India will remain an important market for AirAsia. Tata Sons has been an excellent partner and we look forward to continuing working closely together in other areas of growth,” said Bo.

AirAsia India, which is headquartered in Bengaluru, flies to 19 domestic destinations across India with 30 Airbus A320 aircraft.

MIDF Amanah Investment Bank Bhd previously stated that the disposal would improve the group’s dire cash position.

The group’s cash balances stood at RM618.2 million based on its results for the third quarter ended Sept 30, 2020, released in November.

The research firm also said the announcement was “long anticipated” as AirAsia India was never a profitable venture to the group and non-core market for AirAsia.

AirAsia Group’s share price closed 1.73% or 1.5 sen lower to close at 85 sen, valuing the company at RM2.84 billion.