Tata snubs AirAsia India offer; AirAsia Group justifies loan

Tata Sons, which holds a 51% stake in AirAsia India (I5, Bangalore Int’l) and has, according to media reports, considered buying the remaining 49% of the venture from cash-strapped AirAsia Group, has reportedly snubbed an offer for the minority stake from New York-based, India-focused investment firm Interups. Interups also offered to acquire Tata’s stake at the same valuation, and AirAsia Group, which is looking at exiting India, endorsed its offer, India’s Business Standard reported. But Tata Sons’ consent is necessary because both partners have the right of first refusal to each other’s stake. “There was no response to the Interups proposal from the Tatas even though the offer was backed by AirAsia Berhad, which was getting around USD54 million by selling its stake in the Indian venture,” a legal source told the newspaper. Interups, which is active mainly as an investment advisor for projects in India, has also looked at investing directly in AirAsia Group itself, the source alleged. Tata Sons has had to invest additional money both in AirAsia India, as AirAsia Group cannot do so, and in Vistara (UK, Delhi Int’l), which it runs in partnership with Singapore Airlines, so that both airlines can continue to operate. In related news, AirAsia Group reiterated in a stock exchange filing on October 30 that the MYR300 million ringgit (USD72 million) loan it received from Sabah Development Bank was completed in accordance with all of Malaysia’s laws, policies, and procedures. The transaction took five months to complete from the time of the application, it said. The Sabah state bank approved the loan, it elaborated, to boost the development of various projects in the eastern Malaysian region to create a significant positive socio-economic impact for the state as a whole.