Tata Group, Singapore Airlines infuse Rs 585 crore in Vistara: Report
The infusion is for maintaining liquidity, covering fixed costs and making payments to lesser,
November 23, 2020 / 02:40 PM IST
Promoters Tata group (51 percent owner) and Singapore Airlines (49 percent owner) have invested Rs 585 crore to keep Vistara afloat amid the COVID-19 pandemic – in what is their second-highest equity infusion in a year in the airline.
The Rs 585 crore capital for FY21 was through purchase of shares in a rights issue, The Economic Times reported.
Moneycontrol could not independently verify the report.
Overall, shareholders have pumped three tranches of infusions (first in April of Rs 500 crore and second in July of Rs 750 crore) into the airline since the pandemic shut air travel completely in March – and has only resumed in slow phases. Total investment in the first seven months of FY21 is now Rs 1,835 crore – up from the Rs 1,500 crore in FY20, the report said.
The infusions are for maintaining liquidity, covering fixed costs and making payments to lesser, executives told the paper.
Vinod Kannan, Chief Commercial Officer of Vistara, acknowledged that the pandemic has affected growth plans, but did not comment on the financial information, as per the report.
He added that shareholders “remain committed to the expansion strategy and long-term vision” but there are “many unknowns at this point of time”, adding that much would depend on how soon a vaccine is available and how soon demand returns to pre-COVID levels.
For FY20 Vistara had cash and carry equivalents of Rs 700 crore and has accumulated losses of more than Rs 4,400 crore since it began operations. The pandemic has likely widened losses, the company added.