NCLT Approves Air India and Vistara Merger

The National Company Law Tribunal (NCLT) in Chandigarh has approved the merger between Air India and Vistara, directing that Talace and Vistara will dissolve without winding up after the merger’s effective date.

Following the merger, the shareholding pattern of Air India Ltd. will be: Tata Sons Pvt. holding 73.8%, Singapore Airlines Ltd. holding 25.1%, and SBICAP Trustee Co. holding 1.52%. All benefits, entitlements, and obligations of the merged entities will transfer to Air India, with employees continuing their service under their existing terms and benefits. Contracts and liabilities, as well as any pending legal proceedings, will also transfer to Air India.

The companies involved in the merger include Talace Pvt. (holding company of Air India), Tata SIA Airlines Ltd. (operating as Vistara), and Air India Ltd. The merger plan includes reorganizing Air India’s share capital, combining Talace and Tata SIA with Air India, and issuing new shares to Singapore Airlines, a Vistara shareholder.

The NCLT had previously allowed meetings for the secured and unsecured creditors of Vistara, the unsecured creditors of Air India, and the preference shareholders of both Talace and Air India, while waiving the need for meetings with equity shareholders. Following these meetings, a second motion petition was filed, and the merger plan received near-unanimous approval from creditors.

Communications regarding the merger were sent to the Income Tax Department, the Competition Commission of India, the Ministry of Civil Aviation, and other relevant bodies, with no objections raised.

The tribunal emphasized that the merger scheme must comply with all statutory requirements and financial obligations, clarifying that the order does not exempt the companies from taxes, stamp duty, or other statutory dues. The merged entity must complete all related formalities, including obtaining foreign direct investment approval and necessary security clearances, within nine months from the order date.