BackAir India-Vistara merger: NCLT approval paves way for India's largest international carrier backed by Tata
The NCLT's Chandigarh bench has approved the merger of Air India and Vistara, paving the way for the creation of a major airline group. With a combined fleet of 218 aircraft, the merged Air India-Vistara entity will become India's largest international carrier and second-largest domestic carrier
PremiumThe National Company Law Tribunal (NCLT) has given the green light for the merger of Air India and Vistara, paving the way for the formation of India's largest International carrier, PTI reported.
Following the merger, announced in November 2022, Singapore Airlines will hold a 25.1 percent stake in Air India. Vistara is a joint venture between Singapore Airlines and Tata Group.
With a combined fleet of 218 aircraft, the merged Air India-Vistara entity will become India's largest international carrier and second-largest domestic carrier, as per a statement from the Tata Group. The American Airlines Group, with a fleet of 1,521 is the world's largest, and IndiGo is the country's largest domestic carrier with a fleet of 350 aircraft.
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Approval Details
The Chandigarh bench of the NCLT issued a 31-page order approving the "composite scheme of arrangement" involving Talace, Air India, and Vistara — all part of the Tata Group. Air India expects the merger to be finalised by the end of this year.
A two-member bench confirmed that the merger scheme had secured necessary approvals from shareholders and creditors of both airlines. It also received approvals from the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA). Additionally, no significant objections were raised by the Income Tax department or any other parties.
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“Accordingly, a sanction is hereby granted to the 'Composite Scheme of Arrangement' amongst the petitioner companies and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013," the NCLT order said. It also specifies that the scheme shall be binding on the companies and their shareholders.
Post-Merger Formalities
The order states that Vistara will dissolve without undergoing the winding-up process after the merger, following receipt of necessary approvals and security clearances, within nine months from the date of the order.
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“The Transferor Companies (Vistara) shall stand dissolved without undergoing the process of winding up on completion of the merger and associated formalities after receipt of necessary approvals including FDI approval/security clearances as required under relevant CARs (Civil Aviation Regulations) issued by DGCA/MCA/any other authority within a period of nine months from the date of this order," it stated.
The companies must ensure FDI approval by Singapore Airlines and security clearances from DGCA/MOCA within nine months from the order date.
In March, Singapore's competition regulator CCCS conditionally approved the proposed merger. In September 2023, the CCI also gave its approval subject to certain conditions.
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Tata Group took control of the financially struggling Air India in January 2022.
(With inputs from PTI)
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