Vijay Mallya's UB Group is planning to raise around Rs 1,000 crore by divesting minority stakes in its holding company (special purpose vehicle) for its aviation business, which is planned to be eventually listed on the overseas bourses.
According to sources in investment banking, the company is in talks with leading private equity firms such as Blackstone, Texas Pacific Group and Cerberus Capital, among others.
Sources said discussions are in an early stage as the company is in the process of forming the SPV, which will own 83 per cent stakes in Kingfisher Airlines and between 26 per cent and 46 per cent of Deccan Aviation, which the UB group bought into recently, depending upon the response of the open offer that UB must mandatorily make for Deccan.
Industry sources said that the group is also looking at listing the aviation holding company in the overseas market, which will help in establishing its brand in the overseas market for its plans to eventually fly to Europe and the United States. Merchand banking sources said the size of the private placement would be decided after the open offer closes, for which the time-frame is not clear.
It may be recalled that Mallya was also looking at listing the Kingfisher Airlines by 2008. However, after the acquisition of a stake in Deccan Aviation, it is learnt that the company has changed its plan and will go for an overseas listing instead.
UB Group officials were not available for comment. Though the exact valuation of the SPV is not know, sources said that given the current valuation of other aviation company in the country, the new SPV would be valued at around Rs 4,000 to Rs 5,000 crore.
In case the open offer is fully subscribed, the company would end up spending around Rs 1,000 crore. Given the price of Rs 155, sources in the investment banking said that the open offer for 20 per cent is expected to be fully subscribed. In fact, there are clear chances that after the open offer, the UB group may increase its holding in the company to above 51 per cent. This will help it in getting a better valuation for the SPV.