Tata Sons Likely to Tie-up With Other Financial Investors To Acquire AirAsia Stake At Steep Discount
Indian conglomerate Tata Sons is in talks to buy out AirAsia Group Bhd's stake in their airline joint venture in India at a steep discount, the Business Standard newspaper reported on Thursday, citing banking sources.
Tata Sons will likely tie-up with other financial investors to acquire AirAsia's 49% stake in the venture, according to the newspaper.
Malaysian budget carrier AirAsia said earlier in the day that it was in talks to raise more than 1 billion ringgit ($234.52 million) in funds, a day after its auditor cast doubt on its ability to continue as a going concern. Tata Sons declined to comment. AirAsia did not immediately respond to a request for comment.
On Wednesday, auditor Ernst & Young reported that the future of budget carrier is in significant doubt after the collapse in travel demand due to Covid-19 crisis. The report also revealed that the airline's share price tumbled nearly 18 percent. Led by Tony Fernandes, AirAsia's financial performance has also plunged with liabilities exceeding assets by 1.84 billion ringgit.
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AirAsia which flies to over 150 destinations around the world, also reported a quarterly loss of 803 million ringgit for the first three months of the year, after being forced to ground its fleet. The low-cost carrier also said it plans to cut hundreds of jobs in response to the Covid-19 pandemic.
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