Mallya keen on owning part of Air Deccan
Vijay Mallya says he is keen to pick up a stake in Air Deccan, but hastened to add that he had no immediate plans for an outright acquisition, reports Gaurav Choudhury.india Updated: May 08, 2007 02:30 IST
Kingfisher Airlines chairman Vijay Mallya on Monday readily acknowledged that he was keen to pick up a stake in the Bangalore-based low cost carrier Air Deccan, but hastened to add that he had no immediate plans for an outright acquisition.
"Am I interested? Yes. Am I imminently acquiring it? Not decided as yet," Mallya told reporters in New Delhi.
The markets have been abuzz about a possible Kingfisher Airlines bid to acquire a controlling stake in Air Deccan.
Deccan Air, the first low cost airline to be started in the country, wants to raise about $100 million (Rs 450 crore) and is believed to be talking to a clutch of private equity investors as well as airline companies for the funding.
The airline was begun by Captain GR Gopinath, Capt KJ Samuel and Capt Vishnu Singh Rawal. Under the current shareholding structure, the Lachman Dass Ladhani family owns 11.15 per cent of the shares, Western India Trustee and Executor Company 9.16 per cent, Subria CIPEF 13.54 per cent, Reliance Capital holds 4.63 per cent, while the three promoters hold a little over 22 per cent between them.
Reports have indicated the Ladhani family is willing to exit Air Deccan. Sources close to the airline said several key investors including Mallya’s Kingfisher Airlines was keen on picking up the Ladhani stake.
Air Deccan officials have dismissed such reports as "mere speculation".
Though the carrier posted a loss of Rs 213 crore in its latest results, its performance was significantly better than before, its revenue for the quarter rising by 66.34 per cent to Rs 457.45 crore over the corresponding quarter of last year. Its load factor too rose to 83 per cent from 71.75 per cent. It is currently ranked third in market share behind Indian (IA) and Jet Airways.
The Deccan board also decided to hive off the charter services into a separate entity through a wholly-owned subsidiary and transfer the maintenance and repair facility to a separate entity.
The major boom in Indian aviation notwithstanding, analysts have maintained that consolidation is in the offing. While the two state-owned carriers Indian and Air India are in the process of merging into a single entity, analysts view that the Jet-Sahara deal could well be the beginning of a series of similar deals in the coming months.