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Mallya may bid for 20% more of Deccan

Mallya may bid for 20% more of Deccan
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First Published: Sat, Jun 02 2007. 12 02 AM IST
Updated: Sat, Jun 02 2007. 12 02 AM IST
United Breweries (Holdings) Ltd, which has acquired 26% stake in the country’s largest low-cost airline company Deccan Aviation Ltd for Rs 550 crore, will fund the deal partly through internal accruals. In keeping with the laws governing Indian stock markets, UBHL will also make an open offer next week to Deccan Aviation’s shareholders to acquire an additional stake of at least 20%.
UBHL currently holds a 80% stake in UB Group’s airline company Kingfisher Airlines. The company is also expected to make a preferential offer out of the 26% stake it bought in Deccan Aviation.
Vijay Mallya, chairman, UB Group, said that at least three potential institutional investors have approached him to invest in UBHL by participating in the preferential issue.
Mallya said that by acquiring 46% stake in Deccan Aviation, the group will become the largest player in India’s aviation space in terms of passengers.
“The key objective of the stake buyout is the various synergies such as route connectivity, feeder service, engineering and maintainance, ground handling facilities and services and the sales and marketing network,” he added.
Mallya said that the Kingfisher-Air Deccan combine will be able to save the cost to the tune of Rs300 crore in the first year itself and end the year with a combined turnover of Rs6,000 crore. Both the airlines use planes from Airbus SAS and Avions de Transport Regional, which will help save operational and maintenance costs.
Deccan Aviation shares lost 1.33% on the Bombay Stock Exchange to close at Rs144.25 on Friday. Shares of UB Holding gained by 1.17% to close at Rs691.80.
Bloomberg contributed to this story.
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First Published: Sat, Jun 02 2007. 12 02 AM IST
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