AIR INDIA , Vistara
The National Company Law Tribunal (NCLT) at Chandigarh has given its nod for a merger between airline companies, Air India and Vistara.
In a ruling passed on June 6, the NCLT approved a composite scheme of arrangement proposed by Talace Private Limited (holding company of Air India), Tata Sia Airlines Limited (a joint venture between Tata Sons Private Limited and Singapore Airlines Limited, which operates Vistara airlines) and Air India Limited (collectively referred to as petitioner companies).
A Bench of judicial member Harlam Singh Thakur and technical member LN Gupta found that there was no hurdle to granting sanction for the merger scheme.
In this regard, the tribunal noted that the proposed merger had been approved by the concerned shareholders and creditors and that no serious objection had been raised by any regulatory authority.
“Accordingly, 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 June 6 judgment said.
The tribunal observed that the petitioner companies had served all necessary notices to relevant statutory authorities including the Ministry of Civil Aviation and the Directorate General of Civil Aviation (DGCA).
The MCA had informed that it had no objection to the proposed merger, provided that foreign direct investment (FDI) approval is secured by Singapore Airlines (a shareholder of Vistara), apart from necessary security clearances required under Civil Aviation Regulations (CARs) issued by the DGCA.
In line with the MCA’s suggestion, the NCLT has given the petitioner-companies nine months of time to complete the process of merger and associated formalities.
“Transferor Companies shall stand dissolved without undergoing the process of winding up on completion of merger and associated formalities after receipt of necessary approvals including FDI approval/security clearances as required under relevant CARs issued by DGCA/MCA/any other Authority within a period of 09 months from the date of this order,” the NCLT judgment said.
Additionally, the NCLT noted that fair trade regulator, the Competition Commission of India (CCI) has also granted its nod of approval.
Given that there were no objections communicated by the concerned Regional Director of companies, the Official Liquidator or the Income Tax department either, the NCLT proceeded to grant its sanction for the merger.
As per a synopsis submitted to the tribunal, Tata Sons is slated to have a 73.38 per cent stake in the merged entity while Singapore Airlines will have a 25.1 per cent stake.
The remaining 1.52 per cent of shares is to be held by SBICAP Trustee Company Limited on behalf of the Air India Employee Settlement Trust.
Advocates Atul V Sood and Bharat Apte appeared for the petitioner-companies.
Edward Augustine George represented the Official Liquidator. Company Prosecutor Vineet Khatri represented the Regional Director, Northern Region. Standing counsel Yogesh Putney represented the Income Tax Department.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
