Published on : Friday, April 12, 2019
Tata Sons pumps in Rupees 459 crore via two rights issue and Singapore Airlines (SIA) adds Rupees 441 crore, as per RoC documents filed by Tata SIA Airlines Ltd. The equity infusion will help to improve Vistara’s financial health and take delivery of new planes from Airbus SE and Boeing Co.
Tata Sons and Singapore Airlines own stakes of 51 per cent and 49 per cent, respectively, in Tata SIA Airlines, which runs the full-service airline, Vistara. Of the total, Tata Sons pumped in Rupees 459 crore of fresh equity by subscribing to two rights issues—one in December, the other in March.
Following a board meeting on 6 March, Vistara informed the corporate affairs ministry on 18 March that the company had approved an issue of shares worth Rupees 500 crore on a rights basis.
As per the rights issue documents, Tata Sons will purchase 255 million equity shares of Tata SIA Airlines at Rupees 10 each, while Singapore Airlines will buy 245 million shares. In December, Vistara raised Rupees 400 crore through a separate rights issue by allotting 204 million shares to Tata Sons and 196 million shares to Singapore Airlines at Rupees 10 apiece.
The proceeds of the rights issue will be mostly used to fund the purchase and lease of 56 aircraft. The money will also help in lowering losses and attaining break-even faster as per the officials.