Malaysian budget airline AirAsia Group Bhd said on Tuesday 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 the sale would allow it to focus on its recovery in its key Southeast 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.
The announcement comes two months after AirAsia shut its operations in Japan, citing highly challenging conditions amid the pandemic.
Group Chief Executive Officer Tony Fernandes told Reuters in September that the group intended to consolidate and strengthen its foothold in Southeast Asia, which could mean exiting both Japan and India.
Last month, AirAsia announced it was reviewing its investment in India, saying its operations there had been draining cash and adding to the group’s financial stress.
AirAsia Group said it expects to complete the sale to Tata Sons by March 2021.
The group said 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 period as the pandemic took its toll on travel.
Fernandes has said the company had disposed of spare engines to raise cash and was open to other potential monetisation opportunities.