 "AirAsia, Tata JV to constitute 6-member board")
Air Asia with a 49% stake will have two board members which includes Kamarudin Bin Meranun apart from Fernandes. Tata Sons with 30% will also have two members which include R Venkataramanan and Bharat Vasani and Telestra Tradeplace with 20% stake will be represented in the board by Arun Bhatia. The sixth board member shall be an Indian national who will be appointed as non executive chairman of the board upon agreement of all the three shareholders.
Fernandes is trying to rope in Ratan Tata for this slot. The move of having four of the six members in the board as citizens of India is in consonance with the FDI policy that permits foreign carriers to invest up to 49% only if the board is made up of majority of Indian citizens.
Fernandes is trying to rope in Ratan Tata for this slot. The move of having four of the six members in the board as citizens of India is in consonance with the FDI policy that permits foreign carriers to invest up to 49% only if the board is made up of majority of Indian citizens.
In its application to the Foreign Investment Promotion Board, the three partners have committed that they will, not later than fourteen days, infuse an amount of Rs 50 crore ( US $ 9 million) in the proportion set of their shareholding to set up the joint venture company. Within 45 days of receiving the no objection certificate from the DGCA to set up a new airline, it will further recapitalize the JV company with an additional amount of $21 million again in the same proportion as agreed between the three partners. The obligation of Tata Sons Ltd to subscribe to the shares of the JV will be limited to an aggregate investment of $9 million by way of equity contribution.
Tata Sons will not be required to provide any kind of guarantee letter of comfort or other direct or indirect shareholder support in any form in relation to any debt or any further equity funding for the JV.
The proposed company will be engaged in the business of providing low cost scheduled passenger services, operating single aisle narrow body aircraft flying under four hours. Secondly it will initially operate on domestic routes but at a later date on international routes to and from India if permitted by the government and regulations. It will also carry other ancillary business activities which include cargo handling, renting and leasing (except financial leasing) amongst others.
The airline will use the brand name “Air Asia” to start its services in the country.