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Vistara Issues Ultimatum to Pilots Over New Pay Structure Amid Merger with Air India

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Vistara, in the midst of its merger with Air India, has given an ultimatum to its pilots regarding a new pay structure, sparking concerns among pilots, particularly First Officers, who anticipate significant pay cuts. The ultimatum, issued just hours before the deadline to accept the new pay terms, warns of potential exclusion from the integrated airline for those who fail to comply. The new pay structure, under scrutiny by pilots, offers a minimum guaranteed flying time of 40 hours for all pilots, down from the current 70 hours. Consequently, First Officers are expected to endure a pay cut of nearly 57%. They argue that under the new terms, they would need to fly up to 76 hours to earn what they previously earned at 70 hours, while Captains and Senior Captains face less drastic reductions, needing to fly 52-55 hours and 55-60 hours, respectively, to maintain their previous salary levels. Legal experts weigh in, suggesting that changes to employment conditions post-hiring may not be legally enforceable, potentially rendering any bonds or agreements signed by pilots, particularly in relation to training loans owed to the airline, invalid. Moreover, concerns loom over the transition of some pilots to widebody aircraft from the current narrowbody Airbus A320, potentially delaying their career progression to Captain roles and impacting their earnings. With plans to halve flight operations by June and cease independent operations by October as part of the integration process with Air India, Vistara aims to conclude the merger by mid-2025. Conditional approval from regulatory bodies in Singapore and India has been secured, with further approvals pending. The ultimatum has intensified tensions between Vistara and its pilots, highlighting the complexities and challenges associated with mergers and restructuring within the aviation industry.  

Centre Raises Threshold for Merger and Acquisition Vetting by Competition Commission of India

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The Corporate Affairs Ministry has announced revisions to the thresholds for mergers and acquisitions (M&As), altering the criteria for exemption from Competition Commission of India (CCI) approval. Under the new regulations, companies are not obligated to notify the CCI if the target entity’s assets, including subsidiaries, amount to less than Rs 450 crore, with a turnover below Rs 1,250 crore. This represents an increase from the previous thresholds of Rs 350 crore for assets and Rs 1,000 crore for turnover. The Ministry has concurrently revised the ‘de-minimis’ or small target exemption threshold, which absolves certain M&As from CCI scrutiny. This exemption now applies to transactions where the asset value in India does not exceed Rs 350 crore or the revenue from India does not exceed Rs 1,000 crore. Vaibhav Choukse, partner and head of competition law at JSA Advocates and Solicitors, hailed the move as a significant step towards facilitating M&As in India, aligning with the government’s agenda of promoting ease of doing business. He noted the 150% increase in the existing thresholds under Section 5 of the Competition Act and the adjustment of De Minimis thresholds. Amit Agarwal, partner at Nangia & Co LLP, echoed Choukse’s sentiments, emphasizing the positive impact of the revisions on the ease of doing business and the M&A landscape in India. However, analysts caution that raising exemption limits may present challenges, particularly for startups in their initial years, which may not meet the asset or revenue criteria but could contribute substantially to acquiring companies post-deal. The example of Facebook’s acquisition of WhatsApp in 2014, which escaped CCI scrutiny due to threshold limitations, highlights the potential implications for competition in relevant markets. While the revisions aim to streamline M&A processes and foster business growth, they also underscore the need for vigilant oversight to ensure healthy competition and market dynamics are preserved, particularly in the digital sphere where transformative deals can have far-reaching consequences.

RBI Approves Merger of Fincare Small Finance Bank with AU Small Finance Bank

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The Reserve Bank of India (RBI) has given its approval for the merger of Fincare Small Finance Bank Ltd with AU Small Finance Bank Ltd, effective from April 1, 2024. Following the merger, all branches of Fincare Small Finance Bank Ltd will operate as branches of AU Small Finance Bank Ltd. This decision from the RBI comes after the Competition Commission of India (CCI) had previously approved the merger of the two banks. As per the CCI statement, the merger involves Fincare and AU, with AU being the entity resulting from the merger. Shareholders of Fincare will receive shares in the merged entity following the combination. AU Small Finance Bank offers a range of personal and commercial banking services, including deposits, loans, debit and credit card services, institutional banking, and digital banking services. Headquartered in Jaipur, AU Small Finance Bank operates under the AD-II bank category for foreign exchange transactions and provides ancillary services such as the distribution of insurance and investment products like mutual funds. On the other hand, Fincare Small Finance Bank offers deposit services like savings and current accounts, fixed deposits, and recurring deposits, along with lending services such as retail and microfinance loans. Additionally, Fincare provides digital banking services and distributes insurance products. The merger between Fincare Small Finance Bank and AU Small Finance Bank is expected to streamline operations and enhance the range of services offered to customers across the country.  

Sony Board to Decide on $10-Billion Merger with Zee Entertainment Amid Leadership Dispute

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Sony Group has convened a board meeting on January 19 to determine the fate of the proposed $10-billion merger with Zee Entertainment Enterprises. The decision, expected to be communicated to the Tokyo Stock Exchange next week, may indicate a potential discontinuation of the merger plan. The key point of contention revolves around the leadership of the merged entity, particularly the role of Punit Goenka, Zee’s current CEO and son of its founder Subhash Chandra. Despite the 2021 agreement designating Goenka as the CEO of the merged company, Sony has shifted its stance and is reluctant to have him lead the entity. This change is exacerbated by an ongoing regulatory investigation, with the Securities and Exchange Board of India (SEBI) alleging deceptive practices by Zee, including false claims about loan recovery and misuse of positions by Chandra and Goenka. The protracted stalemate over leadership has raised concerns within Sony about proceeding with the deal. Even after Goenka’s voluntary decision to relinquish the CEO position following the merger, uncertainties persist. Zee Entertainment’s request to extend the deadline for completing the deal, originally set for December 21, 2023, indicates unresolved issues, including the leadership role of Goenka, requiring additional time for negotiations. Insiders at Sony suggest that even if Goenka agrees to step down, meticulous scrutiny of condition precedent pacts and financial adjustments must occur before finalizing the merger. Zee’s financial performance has seen a significant decline since the merger announcement, with net profit plummeting from Rs 956 crore in FY22 to Rs 48 crore in FY23. The outcome of the board meeting carries significant implications for the future of the merger, as insiders indicate that for the deal to progress, Goenka may need to step down on the day the new merged company is established. The decision will shed light on whether Sony and Zee can overcome the leadership dispute and move forward with the high-profile merger.

ZEE Entertainment Shares Rebound After Initial Plunge on Director’s Exit Ahead of AGM

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ZEE Entertainment Enterprises Ltd (ZEE) witnessed a brief setback as its shares tumbled by 9% during Thursday’s trading session following the unexpected exit of non-executive non-independent director Adesh Kumar Gupta from the board. However, the stock demonstrated resilience, recovering most of its losses as the session progressed. Gupta, who served as a crucial member of the audit committee and chairman of the risk management and stakeholders relationship committees, cited personal reasons and commitments for his departure ahead of the upcoming annual general meeting (AGM). The initial market reaction led to a decline of 8.79%, with the stock hitting a low of Rs 284.10 on the BSE. In his resignation letter, Gupta expressed regret for being unable to continue as a director due to personal reasons and commitments. He withdrew his re-appointment at the AGM but extended his best wishes for the company’s success, particularly emphasizing the completion of the pending merger with Sony. ZEE Entertainment responded by confirming Gupta’s exit from key committees after the AGM. The company’s 41st AGM is scheduled for Saturday, December 16, at 4:00 pm (IST). ZEE has announced that the AGM will be conducted through video conferencing and other audio-visual means, adhering to circulars issued by the Ministry of Corporate Affairs and the Securities and Exchange Board of India. Investors, initially concerned about the sudden exit, regained confidence as the trading session progressed, reflecting the market’s anticipation of a smooth AGM and positive outcomes for the pending merger with Sony.