Malaysian carrier AirAsia has reportedly reduced the price for its 49 per cent stake in AirAsia India — its share of the airline joint venture with Tata Group — to $50 million due to losses incurred amid the ongoing Covid-19 pandemic.
According to a report published in Business Standard, the Tata Group is in advanced talks with to acquire 49 per cent state-owned AirAsia Group in the Indian joint venture (JV), AirAsia India.
AirAsia’s decision to reduce the price of its stake, as per the report, comes at a time when the financial health of AirAsia Group Berhad and AirAsia India declined sharply due to the coronavirus pandemic.
A source told the newspaper that the falling airline valuations have brought down the expectations of the Malaysian company, which is now looking to exit the India joint venture with Tata.
The report added that the threat of action by Indian investigation agencies against AirAsia India and its promoter Tony Fernandes could be another reason why AirAsia Group wants to exit India.
Tata Group, on the other hand, is reportedly seeking to expedite the process of acquiring AirAsia Group’s stake in the loss-making airline joint venture before the deadline of Air India’s disinvestment expires at the end of August, as per the report.
The source further told Business Standard that the Tata Group is likely exploring the option of roping in a financial partner for preparing a bid for Air India.