Under the merger deal, Singapore Airlines will own 25.1 % stake in Air India.
The National Company Law Tribunal (NCLT) approved the merger of Air India and Vistara, on Thursday. The merger has resulted in the creation of one of the world’s largest airline conglomerates. Under the merger deal, Singapore Airlines will own 25.1 % stake in Air India. Vistara is a joint venture between Tata Group and Singapore Airlines.
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Air India -Vistara merger
Air India is planning to finalize the merger by the end of this year. The merger was announced in November 2022. In a detailed order, the Chandigarh branch of the NCLT has approved for composite scheme of arrangement which will bring Air India, Vistara, and Talace all under the Tata Group umbrella.
The NCLT in its order mentioned,’’ A sanction is hereby permitted to the ‘Composite Scheme of Arrangement’ between the petitioner companies and their shareholders under Sections 230 to 232 and Companies Act, 2013 provisions,’’ as reported by PTI. The order asserted that the approved scheme would be binding on the companies and their shareholders.
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Norms for merger scheme
Foreign Direct Investment (FDI) approval must be avail by the companies from Singapore Airlines along with the security clearances within nine months from the date of the order issued. The approval should be per Civil Aviation Regulations (CARs) issued by the Ministry of Civil Aviation and DGCA.
Vistara, the Transferor Company, will be dissolved without engaging in the winding-up process once the merger formalities have been completed. All the pending approvals such as security checks, and FDI clearance should be taken within the deadline.
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The two key regulatory bodies, the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA) have given clearance for the merger scheme. The two-member bench highlighted that all the necessary approvals from the creditors and shareholders of both companies have been secured.
The stakeholders or the Income Tax Department have given a green signal for the merger.
(With PTI inputs)
