Vijay Mallya gains 26 pc control over Air Deccan

Bangalore, June 01: The UB Group of liquor Baron Vijay Mallya owning the Kingfisher Airline will invest Rs 550 crore to take a 26 per cent stake in low cost airliner Air Deccan.

The Air Deccan Board, which met here this evening approved a preferential allotment of over 35.22 million shares to the UB Group at Rs 155 per share, Air Deccan Managing Director Capt G R Gopinath told newsmen here.

Announcing the Board's decision, Capt Gopinath said that from various investors who had shown interest in investment in the low cost carrier, the Board picked up the UB offer in view of the inherent synergy that existed between Kingfisher and Air Deccan. He said Air Deccan would continue to adopt its strategies as a low cost carrier.

Air Deccan wanted onboard the company people with long term vision and found in Kingfisher the most suitable investor he added.

Air Deccan in a release after the board meeting said with its robust low cost business model Air Deccan had attracted investments from various large industrial houses and large Private Equity Investment firms. Taking into account the interest of the various stakeholders- the employees, the investors and the shareholders, the company wanted an investor with a long term vision, an in-depth understanding of aviation and someone who would strengthen the company further.

"Amongst the various investors, Air Deccan found UB group the most suitable and approved their investment of Rs 550 crores with a stake of up to 26 per cent. Edelweiss Capital were the advisors to the transaction" the release added.

Air Deccan, the country's fastest growing low cost carrier had the largest network in India today covering 65 airports, plying over 350 flights a day. The airline currently operated a brand new fleet of 19 Airbus A 320 aircraft, with an average age of 1.5 years and 24 ATR Turboprop aircraft. Since its inception in August 2003, Air Deccan has carried over 11 million passengers.

UNI