Tata Sons will likely have to make a provision of 26 billion rupees ($325.69 million) as accumulated losses for low-cost carrier AirAsia India.
India’s Tata Sons will likely have to make a provision of 26 billion rupees ($325.69 million) as accumulated losses for low-cost carrier AirAsia India , which it’s seeking to absorb into unit Air India and merge with Air India Express, the Economic Times reported on Wednesday.
Earlier this year, Tata Group-owned Air India proposed to buy the entire equity share capital of AirAsia India, in which Tata has a majority stake, to merge into a single airline. Tata Sons has an 83.67% stake in AirAsia India.
No decision has been taken on whether the write-off will be included in the balance sheet of Tata Sons or Air India, the Economic Times reported, citing officials close to the development.
Tata, Air India and AirAsia India did not immediately respond to Reuters’ requests for comment.
Autos-to-steel conglomerate Tata bought state-run carrier Air India in a $2.4 billion equity and debt deal earlier this year, regaining ownership of what used to be India’s flagship carrier after nearly 70 years.
The deal included three entities – full-service carrier Air India, its low-cost arm Air India Express, and AI SATS, which provides ground-handling and cargo services.