The National Company Law Tribunal (NCLT) on Thursday approved the merger of Air India and Vistara, paving the way for the creation of one of the world’s largest airline groups.
After the merger, announced in November 2022, Singapore Airlines will hold a 25.1 per cent stake in Air India. Vistara is a joint venture between Singapore Airlines and Tata Group.
In a 31-page order, the Chandigarh bench of the NCLT approved the “composite scheme of arrangement” involving Talace, Air India and Vistara. They are all part of the Tata Group.
Air India expects the merger to be completed by the end of this year.
A two-member bench of Chandigarh-based NCLT bench observed that the scheme has already received necessary approvals from the shareholders and creditors of both the airlines.
Additionally, it has also received applicable approvals including that from the fair trade regulator, Competition Commission of India (CCI) and Directorate General of Civil Aviation (DGCA). Further, neither the Income Tax Department nor any other interested party has raised “any sustainable objection”.
“Accordingly, sanction is hereby granted to the ‘Composite Scheme of Arrangement’ between the petitioner companies and their respective shareholders under sections 230 to 232 and other applicable provisions of the Companies Act, 2013,” the order said NCLT.
He added that the sanctioned scheme will be binding on the petitioner companies and their respective shareholders.
“The Transferor Companies (Vistara) will be dissolved without undergoing the liquidation process upon completion of the merger and associated formalities after receiving necessary approvals including approval of FDI/security clearances as required by CAR (Civil Aviation Regulations). ) relevant authorities issued by the DGCA/ MCA/ any other authority within a period of nine months from the date of this order,” it said.
The order also says that the companies will have to ensure approval of Foreign Direct Investment (FDI) by Singapore Airlines (a shareholder of Vistara) and security clearances required by the relevant CARs of DGCA/MOCA within a period of nine months from the date of this order.
In March this year, Singapore’s competition regulator CCCS gave conditional clearance to the proposed merger. In September 2023, the deal received ICC approval, subject to certain conditions.
Tata Group took over the loss-making Air India in January 2022.
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