His spirits soar further

36TH Full Time Programme In Planning & Entrepreneu...

The flamboyant Vijay Mallya of UB Group is cheering. After having acquired premium scotch distiller Whyte & Mackay for $1.18 billion, he has now been successful in acquiring a 26% stake in Deccan Aviation at Rs.5.5 billion. The Kingfisher– Air Deccan M&A deal is the third deal in the Indian skies this year. The previous ones were the Jet-Sahara and Air-India- Indian. Though his first attempt at the stake acquisition was snubbed by G.R. Gopinath, Mallya came out victorious in his second attempt. UB Group has been allotted 96,77,419 fully paid-up equity shares of Air Deccan, at Rs.155/share.

While an advance amount of Rs.1.5 billion has already been paid, the remaining amount would be paid in another four weeks time. An open offer of another 20% stake is soon to be launched by Mallya and he has already initiated talks with the financial institutions for the same. Both the airlines together would now boast of a fleet of 71 aircraft s, coverage of 70 destinations and command 33% market share. With the domestic skyline being now strengthened, Mallya now aims to cross the national boundary. Earlier, Mallya had placed orders for five A380s with an option for another five that are used for longhaul flights. With the Indian government keen on bringing down the cap of flying international from five years to three years of domestic flying, Mallya should be in high spirits!

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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