PETALING JAYA: AirAsia Group Bhd plans to sell 32.67% of its stake in AirAsia India to Tata Sons Pte Ltd for US$37.7 million (RM153 million), Reuters reported.
In a filing with Bursa Malaysia today, it said that the sale would allow the company to focus on its recovery in its key Southeast Asian markets amid the impact of the Covid-19 pandemic on travel.
“The Directors having considered the rationale for the Transaction and after careful consideration, are of the opinion unanimously that the transaction is in the best interest of AirAsia and its shareholders,” the company said.
This is the latest setback to the budget airline operator, having announced two months ago that it was shutting down its operations in Japan due to the highly challenging conditions following the impact from the pandemic, especially to the airline industry.
The sale will bring the group’s stake in AirAsia India down from 49% to 16.33%. Tata Sons already owns a 51% interest in the Indian operations of the low-cost carrier.
Meanwhile, Bernama reported AirAsia Group as saying that the proposed disposal would result in a gain on disposal of RM152.58 million in the fourth quarter of 2020.
“The net assets and cash balance will also increase by the same amount immediately after this cash disposal exercise,” it said.
As part of the transaction, there will be a call option in respect of the group’s remaining 16.33% stake in AirAsia India, exercisable by Tata Sons any time after the transaction is completed.
The total consideration in respect of the options granted for the group’s remaining 16.33% stake would be US$18.83 million.
The airline said it had further agreed to waive off unpaid brand licence fees payable by AirAsia India to AirAsia Bhd under the brand licence and technical services agreement dated Dec 30, 2019, due to the Covid-19 pandemic, Bernama reported.
It added that this waiver would not have any material effect on the earnings per share, net assets per share and gearing of AirAsia and its subsidiaries.