The Singapore Airlines (SIA) Group has announced that it’ll invest INR 3,194.5 crore (approx. USD 378.48 million) into Air India following the completion of the carrier’s merger with Vistara. The group made the announcement on Friday, November 8, along with its financial results.
Vistara, which seized its operations with its last international flight to Singapore on Tuesday midnight, was a joint venture between India’s Tata Group and the Singapore Airlines. It had commenced operations on January 9, 2015.
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“The Air India-Vistara merger is expected to complete within November 2024. For SIA, the consideration comprises its 49% interest in Vistara and INR 20,585 million in cash (equivalent to S$318 million), in exchange for a 25.1% equity interest in the enlarged Air India. Upon the completion of the transaction, the Group expects to recognise a non-cash accounting gain of approximately S$1.1 billion. At the same time, it will also start equity accounting for its share of Air India’s financial results,” the SIA’s official statement read.
#WATCH | Odisha: Vistara's last flight UK 782 departed from Biju Patnaik International Airport to Delhi's IGI Airport.
— ANI (@ANI) November 11, 2024
The airline prepares for its integration with Air India on Monday. Vistara, a joint venture between Tata Group and Singapore Airlines, will fully merge with… pic.twitter.com/jSLAeNKu08
“The merger, announced by SIA and Tata Sons (Tata) in November 2022, includes an agreement for SIA to contribute its share of any funding previously provided by Tata prior to the completion of the merger, together with relevant funding costs, up to INR 50,200 million (equivalent to S$880 million, based on the prevailing exchange rates at that time). This would allow SIA to maintain 25.1% stake in Air India.
“SIA’s additional capital injection is expected to be INR 31,945 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 2024, through subscription to new Air India shares. Future capital injections will be considered based on Air India’s requirements and available funding options.
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“The merged entity will have a significant presence across all key Indian air travel segments including domestic, international, full-service, and low-cost operations. This will strengthen SIA’s multi-hub strategy, allowing it to continue participating directly in India’s large and fast-growing aviation market.
“Air India and SIA recently agreed to significantly expand their codeshare agreement, adding 11 Indian cities and another 40 international destinations to their network. This marks the first extensive expansion of codeshare arrangements between the airlines since 2010, offering customers enhanced travel options between Singapore and India, as well as beyond. Both carriers will continue to explore ways to deepen their commercial partnership,” it added.
