Malaysian budget airline AirAsia Group Bhd has said that it plans to sell 32.67% of its stake in its Indian operations to majority shareholder Tata Sons for $37.7 million.
The airline, which until now owned 49% of AirAsia India as part of a joint venture with the Indian conglomerate, said that the sale will allow it to focus on its recovery in its key south-east Asian markets amid the impact of the COVID-19 pandemic on travel.
"The directors having considered the rationale for the transaction and, after careful consideration, are of the opinion unanimously that the transaction is in the best interest of AirAsia and its shareholders," the airline said in a bourse filing.
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The announcement comes two months after AirAsia shut its operations in Japan, citing highly challenging conditions amid the pandemic.
Group CEO Tony Fernandes told Reuters in September that the group intended to consolidate and strengthen its foothold in south-east Asia, which could mean exiting both Japan and India.
Last month, AirAsia announced that it was reviewing its investment in India, saying that its operations there had been draining cash and adding to the group's financial stress.
AirAsia Group said that it expects to complete the sale to Tata Sons by March of 2021.
The group said that it has also agreed to waive unpaid brand license fees payable by AirAsia India to subsidiary AirAsia Berhad.
The airline reported its fifth consecutive quarterly loss in the July-September 2020 period as the pandemic took its toll on travel.
Fernandes has said that the company has disposed of spare engines to raise cash and was open to other potential monetisation opportunities.
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