NCLT Approves Air India-Vistara Merger, Paving Way For Global Airline Conglomerate

NCLT Approves Air India-Vistara Merger, Paving Way For Global Airline Conglomerate

The National Company Law Tribunal (NCLT) granted approval on Thursday for the merger of Air India and Vistara, marking a significant step towards the formation of one of the world's largest airline conglomerates. The merger, announced in November 2022, will result in Singapore Airlines holding a 25.1 percent stake in Air India. Vistara, a joint venture between Singapore Airlines and Tata Group, will also be part of this consolidation.

In a detailed 31-page ruling, the NCLT's Chandigarh bench sanctioned the "composite scheme of arrangement" involving Talace, Air India, and Vistara, all entities under the Tata Group umbrella.

Air India anticipates the merger to be finalized by the year's end.

A two-member bench at the Chandigarh branch of the NCLT noted that the scheme had obtained the necessary approvals from the shareholders and creditors of both airline companies. Additionally, it had secured relevant clearances from regulatory bodies such as the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA). Furthermore, there were no substantial objections raised by the Income Tax Department or any other interested party.

In light of these factors, the NCLT order stated, "Accordingly, sanction is hereby granted to the 'Composite Scheme of Arrangement' among the petitioner companies and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013."

It was further stated that the approved scheme would be binding on the petitioner companies and their respective shareholders.

"The Transferor Companies (Vistara) shall be dissolved without undergoing the winding-up process upon completion of the merger and related formalities, following the receipt of necessary approvals, including FDI approval and security clearances as mandated under relevant Civil Aviation Regulations (CARs) issued by DGCA, MCA, or any other authority, within a period of nine months from the date of this order," it stated.

The order also mandated that the companies ensure Foreign Direct Investment (FDI) approval by Singapore Airlines (a shareholder of Vistara) and obtain security clearances as required under relevant Civil Aviation Regulations from DGCA/MOCA within a nine-month timeframe from the date of this order.

In March of this year, Singapore's competition regulator, CCCS, conditionally approved the proposed merger. Subsequently, in September 2023, the deal received approval from the CCI, contingent upon certain conditions.

In January 2022, Tata Group assumed control of the financially struggling Air India.