Kingfisher plans 25% stake sale

Vijay Mallya's Kingfisher Airlines is believed to be discussing stake sale with three foreign airlines — British Airways, Singapore Airlines and Virgin — as a strategic investment is expected to fetch better valuation compared to the numbers indicated by PE investors.

The airline is holding exploratory talks with international carriers for diluting up to 25% stake. The move comes as the Centre is reportedly planning a policy change to allow foreign airlines to invest in domestic carriers with a cap of just below 26%.

The civil aviation ministry had met the airlines on October 30 to discuss key policy changes including allowing foreign airlines to pick up stake in domestic carriers. This meeting has triggered expectation that the government may allow the foreign carriers to buy equity in Indian companies. It must be mentioned that while foreign airlines are not allowed to pick up equity in aviation companies, other institutions and foreign investors are free to hold up to 49% stake.

Read more in The Economic Times article.

Jet Air to sell 10% stake to global funds

Naresh Goyal who holds close to 80% stake in Jet Airways, today announced plans to dilute 10% equity to international funds. He however did not disclose the identity of the fund, nor the timing or price. Jet Airways is country’s largest private airline and controls one-third of the domestic market share. It also runs JetLite, a low-cost airline.

At the current stock price, a 10% dilution may bring in Rs 340 crore to the struggling airline.This is over and above the company’s plans to raise up to $800 million through a qualified institutional placement of equity shares and $400 million through a rights issue.The company also is raising $1 bn through debts to finance the delivery of five A330 Airbus and three Boeing 777.

Read more in The Economic Times article.

Tatas in JV talks with jet-maker Embraer

Indian conglomerate Tata does not seem satisfied after making history by taking over Anglo-Dutch steel maker Corus and Britain’s premium auto brands Jaguar and Land Rover. It is now considering a partnership with Brazilian aircraft maker Embraer.

Accordin to sources talks were on with Embraer for starting a joint venture for production of aircraft. The world’s third-largest plane manufacturer is unable to cope with orders it is getting from various countries and private players.Tata had offered to set up a joint venture with the aircraft giant, the only firm that makes 120-seater commercial jets.

Read more in The Business Standard article.

Deccan, Kingfisher to merge in 3:7 ratio

The Deccan Aviation board, at a meeting held today, appointed April 1, 2008 as the date for merger with Kingfisher Airlines.Subsequently, Deccan Aviation will be known as Kingfisher Airlines.

"Deccan Aviation shall allot shares in the ratio of three fully paid equity shares of face value Rs 10 each for seven equity shares of Rs 10 each held in Kingfisher Airlines," Deccan's release to the Bombay Stock Exchange said today.

The share entitlement ratio has been determined based on the recommendation of independent valuers KPMG India and Dalal & Shah.Deccan's charter business would be sold to an entity to be jointly owned by Captain Gopinath and the UB Group, the release added.

PE firms approach GoAir to pick up minority stake

Wadias-promoted GoAir has been approached by various private equity players for acquisition of a minority stake, while valuing the low-cost private carrier at $400 million (about Rs1,600 crore).Global consulting firm Ernst and Young, on behalf of other players, has approached the company and Wadias have held discussions with them, said a market source.

Private equity investors who have evinced interest in GoAir have valued the airline at $400 million. Sources said the valuation figure has been tabled by investors during a recently held meeting with the Wadias.However, the Wadias have not made any firm decision with regard to the proposal from PE investors.

Earlier, GoAir’s managing director Jeh Wadia had said that the airline has been receiving various equity proposals from PE investors and high networth individuals.
The GoAir management has been considering these proposals, but a decision is yet to be arrived at on these discussions.GoAir is also charting a major expansion plan and has started receiving the deliveries of the $1.2 billion order it had placed with Airbus last year.

Read more in The Live Mint article.

UB group ups stake in Deccan Aviation by 3%

UB group has increased its stake in low-cost airline firm Deccan Aviation by almost 3% through market purchases, stock exchange data showed on Wednesday.UB group firm Kingfisher Radio, that runs Kighfisher Airlines, purchased a total of four million shares (2.95%) on Wednesday on BSE and NSE combined at Rs 275 each.Most of the shares were purchased from Money Matters Advisory and Money Matters (India), according to the BSE and NSE data.

With these purchases, Kingfisher Radio and other group companies of UB group have increased their stake to almost 49%.In September, UB group had made an open offer to the shareholders of Deccan Aviation at Rs 155 a share for a 20% stake.Last week, Deccan Aviation had announced it would merge the airline operations of Kighfisher Airlines with it.

Air India expected to unload 15% stake in IPO

State-owned Air India will likely unload 15 per cent of its equity in an initial public offer (IPO) when its merger with domestic counterpart Indian Airlines is completed. The government has said it is merging the two airlines in a bid to create a "world-class airline" that can compete globally and domestically. Singapore Airlines and Emirates have already expanded into India's booming travel market.

The IPO would be staged once the merger of Air India and Indian Airlines was finished and both airlines' operations were fully integrated.Air India is the nation's biggest international carrier and Indian Airlines is the second-largest domestic airline after privately run Jet Airlines.

The merged airline will fly under the brand of Air India domestically and internationally with a combined fleet size of more than 112 aicraft - comparable to the best airlines in the Asian region.

Read more in The Economic Times article.

UBS, ICICI offload Deccan Aviation stake

UBS Securities, ICICI Ventures and ICICI Bank today sold a part of their shareholding in Deccan Aviation, owner of the low-cost Air Deccan airline.In a series of bulk deals, Money Matters bought all the shares sold by the three entities for nearly Rs 102 crore.

While UBS Securities sold 1.79 per cent stake, ICICI Ventures offloaded 2.31 per cent stake. ICICI Ventures holds shares in Air Deccan through Western India Trustees and Executor Company. ICICI Bank sold 0.91 per cent stake.Prior to the sell-of ICICI Ventures held 6.78 per cent stake, UBS had 2.53 per cent and ICICI Bank 1.05 per cent.

ICICI Bank and UBS sold the Deccan shares at Rs 150 each, and ICICI Ventures sold the shares at Rs 149.96 each.ICICI got Rs 46.9 crore from the sale, UBS got Rs 36.5 crore and ICICI Bank Rs 18.6 crore.

The sale has happened at a time when Vijay Mallya’s UB Group is scaling up its shareholding in Deccan Aviation through a 20 per cent open offer. Priced at Rs 155 a share, the offer was triggered with the Kingfisher group acquiring a 26 per cent stake in the airline. The offer will close on October 1.

UB raises debt for Deccan buy

UB Group has raised Rs 550 crore as debt financing from IDFC, HDFC and IL&FS for its stake buy in Air Deccan.These institutions could pour in more debt as the group company UB Holdings is set to make an open offer for additional 20% stake in Deccan Aviation, the parent of the low-cost airline, shortly.

On May 31, UB Holdings bought 26% stake in Deccan Aviation for Rs 550 crore, and announced plans for a mandatory open offer. At the time of the acquisition, UB indicated that it could rope in financial investors for de-leveraging the acquisition partially, as it had received several expressions of interest from PE funds. But with debt financing clinched, UB is not likely to divest stake for de-leveraging.

UB has tied up debt financing from IDFC and HDFC for over Rs 400 crore. “The debt financing has been arranged for funding most of the 26% purchase,” a top UB official said, without divulging the name of the institutions. IL&FS is believed to have pumped in the remaining Rs 150 crore.

Read more in The Economic Times article