AirAsia’s India JV to fly on its brand name
AirAsia Berhad (AAB) has given its consent and no objection for the use of the words 'AirAsia' as part of the name of the joint venture (JV) company with Tata Sons and Telestra Tradeplace.
This includes its brand name, trademarks and corporate logos, according to the application to the foreign investment promotion board (FIPB).
Malaysia-based AirAsia, Asia's biggest budget airline, has signed an agreement with Tata Sons and Arun Bhatia of Telestra Tradeplace to establish a no-frills airline in India.
AirAsia Investment Ltd (AAIL), an investment arm and subsidiary of multi-national conglomerate AAB, proposes to invest up to $15 million (Rs.80.98 crore), which would constitute up to 49% of the total paid-up equity share capital of the JV.
"The amoung would come from “internal accruals, external borrowings and other forms of funding from group entitities”, it said.
“Further fund of the JV company will be undertaken on the basis of business needs. We propose to make this investment through subscription to share capital.
"We may clarify that we will not risk any loan in India towards our contribution in the share capital of the JV,” said the application to FIPB, the nodal agency that clears foreign direct investments in India.
“It is proposed that resident equity of 51% will be held by Telestra Tradeplace (equivalent to 21% of the total paid up equity share capital amounting to Rs.34.01 crore and Tata Sons Limited (equivalent to 30% of the total paid up equity share capital amounting to Rs.48.58 crore).”
AAIL has sought approval that the JV company, upon being capitalised, be permitted to engage in the business of operating scheduled domestic passenger airlines in India, to engage in ancillary activities of air transport carriers, cargo handling incidental to air transport, renting and leasing (except financial leasing) of aircraft and other service incidental to transport.
AAIL has said that the JV will bring benefits to the Indian economy, enhance development of low-cost scheduled passenger airline services in India and import of sophisticated know-how and technology.