GoAir may offer 40% to Paramount

Yet another tango in the sky has begun. Nusli Wadia and M Thiagarajan, both primarily in the textile business, who are fighting for a pie in the sky, appear to have embarked on a complex corporate manoeuvring in a fast consolidating airline industry. Nusli Wadia Group’s GoAir and Paramount Airways, part of the six decade-old Thiagarajar Mills, are said to be in talks to meet the challenges, post-mega mergers in the Indian aviation space.

GoAir may be open to divesting around 40% stake even as the south-based Paramount Airways has placed a $100-150 million cash buyout proposal to the former. The Chennai-headquartered premium service carrier could lace it with a stake offer to the Wadias in the merged company, sources said.

Significantly, the proposal comes at a time when Nusli Wadia is reportedly reviewing his group’s future direction in the bleeding aviation sector. The group could be veering towards a strategic alliance, given the Wadias’ background of not staying invested in loss-making businesses. GoAir, it may be mentioned, has been in the market to raise funds through equity dilution for well over six months now.

According to the directorate general of civil aviation (DGCA), Jeh Wadia-managed GoAir had 4.1% market share in 2006 while Paramount’s share stood at 1.1%. Close to saturating the southern market, Paramount has unveiled plans to enter the western region next year.

Read more in The Economic Times article.