Air India, Vistara creditors to vote on merger proposal this Saturday
Tata-owned Air India and Vistara have sought approval from their creditors for the merger of the two airlines. Creditors will vote on the proposal on September 23, according to a notice reviewed by ET.
The merger plan has been approved by National Company Law Tribunal (NCLT) and Competition Commission of India (CCI).
People involved in the process said that following approval from creditors the entities will move for permission from Registrar of Companies and aviation regulator DGCA.
The merger is a consolidation effort of the Tata group's aviation business under which Air India and Vistara will merge to form a single full-service entity while Air India Express and AirAsia India will form a low-cost airline which will be a subsidiary of Air India. Singapore Airlines (SIA) which has 49% stake in Vistara will hold 25.1% stake in the company.
According to the proposal, Air India shall allot 3,702,338,129 fully paid-up equity shares to SIA at face value of ₹4 each at a price of ₹5.56 per equity share.
In total, SIA will invest $ 267 million in Air India.
According to the notice, approvals will be sought from both secured and unsecured creditors. A secured creditor is any creditor or lender associated with an issuance of a credit product that is backed by collateral.
Primarily the banks will be a secured creditor while vendors, lessors are termed as unsecured creditors.
Tatas are eager to complete the merger by March 2024 to unlock synergy, executives said. Vistara is conducting aptitude tests for its staff and has launched a culture survey to identify executives who will handle key roles in the merged entity.
As part of this, the non-flying staff of Vistara have been appraised through a process called Hogan Test, designed by
