Tata Sons Limited, the Tata group’s holding company, seeks to raise $4 billion to inject additional funds into Air India and refinance pricey debt, reported Mint citing sources.

Tata intends to raise capital through a combination of stock and hybrid debt to refinance a portion of Air India’s debt and restructure the airline. Tata Sons purchased the airlines from the government in October of last year for $2.3 billion.

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“The Tata group will soon start the process of hiring investment advisers, although informal discussions with a few foreign lenders and some private equity funds are already underway,” one of the people told Mint.

“The debt refinancing portion will be relatively easier as lenders within Tata’s existing banking relationships will step in,” the second person told Mint.

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“The equity component of the transaction may take a bit longer given that globally, the number of private equity funds that invest in airline business are relatively few,” the person added.

Another report last month claimed that Tata Sons will probably make a provision for Rs 2,600 crore in accumulated losses for AirAsia India airlines. CCI accepted Tata Group-owned Air India’s bid to fully purchase the equity capital of low-cost carrier AirAsia India in June of this year. Tata Sons holds 83.67% of AirAsia India, while AirAsia Investment Limited controls the remaining stake.

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Air India’s domestic market share reportedly decreased from 11.6% in January 2020 to 10.2% in January 2021, shortly after Tata Sons closed the acquisition.

Data compiled by the Directorate General of Civil Aviation  (DGCA) shows that Air India’s market share decreased further in July to 8.4%, while Vistara and AirAsia India, the other two airlines owned by the Tata group, had market shares of 10.4% and 4.6%, respectively.

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Tata is overhauling and expanding Air India and its subsidiary Air India Express and is likely to place orders for roughly 200 narrow-body A320 Neo jets and widebody aircraft, according to Mint. By the start of the following fiscal year, these are most likely to be delivered.