Malaysia-based carrier AirAsia will scale back its investment in its Indian subsidiary as financial difficulties continue to trouble the carrier, media reports said. AirAsia will cut its stake in the subsidiary to 13 percent. Tata Sons, which already owned a 75 percent stake in the carrier will increase its stake to 87 percent in the carrier.
It is reported that the change in ownership is unlikely to affect the AirAsia India brand but could see the airline separate from AirAsia’s operations.
In October, AirAsia X proposed restructuring its debt in order to survive the Covid-19 crisis. The carrier has proposed a restructuring of $15.3 billion of its debt and reducing its share capital by 90 percent. The proposed restructuring by AirAsia X will result in the carrier making structural changes to get out of the current crisis, including resizing its fleet and letting go of some of its employees.
AirAsia X said that it is facing liquidity constraints and with no return to normalcy insight, imminent default of contractual commitments will precipitate a potential liquidation.
In September, it was reported that AirAsia is planning to raise around $602 million by the end of the year in order to survive the Covid-19 crisis. The carrier was also reviewing its business in Japan, Reuters reported. According to an AirAsia spokesperson, the carrier would borrow its money from banks as well as from investors. AirAsia was also in talks with local and foreign investors including private equity firms, strategic partners and conglomerates, she confirmed.