In a significant development for the aviation industry, the National Company Law Tribunal (NCLT) in Chandigarh has granted approval for the merger between Air India and Vistara. The decision marks a pivotal moment in the restructuring of these renowned carriers, paving the way for a new era of collaboration and synergy within the sector.
Merger Details and Shareholding Structure: As per the approved merger plan, Talace and Vistara will seamlessly integrate into Air India, with the former entities dissolving without winding up after the merger becomes effective. Following the consolidation, the shareholding pattern of Air India Ltd. will be redefined, with Tata Sons Pvt. holding 73.8%, Singapore Airlines Ltd. holding 25.1%, and SBICAP Trustee Co. holding 1.52%. This strategic realignment is poised to optimize operational efficiencies and enhance market competitiveness for the merged entity.
Transfer of Benefits and Obligations: All benefits, entitlements, and obligations of the merged entities will be transferred to Air India, ensuring continuity and stability in operations. Employees of both Air India and Vistara will continue their service under existing terms and benefits, fostering a seamless transition process. Moreover, contracts, liabilities, and pending legal proceedings will be seamlessly integrated into Air India’s framework, streamlining administrative processes and ensuring regulatory compliance.
Meticulous Merger Process and Regulatory Compliance: The merger process involved meticulous deliberations and adherence to regulatory requirements. Companies integral to the merger, including Talace Pvt., Tata SIA Airlines Ltd., and Air India Ltd., underwent comprehensive restructuring and share capital reorganization. The approval process encompassed consultations with secured and unsecured creditors, preference shareholders, and relevant regulatory authorities, facilitating informed decision-making and consensus-building.
Endorsement and Future Outlook: Crucially, the merger plan garnered near-unanimous approval from creditors, underscoring confidence in the strategic vision and operational synergies of the consolidated entity. Communications regarding the merger were extensively disseminated to regulatory bodies, including the Income Tax Department, the Competition Commission of India, and the Ministry of Civil Aviation, with no objections raised. The tribunal’s endorsement underscores a significant milestone in the aviation landscape, heralding a promising future for Air India and Vistara as they embark on a unified trajectory of growth and innovation.
Compliance and Timeline for Implementation: While granting approval, the NCLT underscored the imperative of compliance with statutory requirements and financial obligations. The merged entity is mandated to fulfill all formalities, including obtaining foreign direct investment approval and necessary security clearances, within a stipulated timeframe of nine months from the order date. This underscores the commitment to regulatory integrity and operational transparency in the merger process.
