Twitter
Advertisement

UB Group's open offer oversubscribed

Vijay Mallya's UB Group, who bought 26 per cent stake in Air Deccan early this year, is set to increase its holding in the low-cost carrier to 46 per cent.

Latest News
article-main
FacebookTwitterWhatsappLinkedin

MUMBAI: Business tycoon Vijay Mallya's UB Group, who bought 26 per cent stake in Air Deccan early this year, is set to increase its holding in the low-cost carrier to 46 per cent as its open offer to buy shares from existing shareholders has been oversubscribed.
    
The UB Group received 35 million shares in the open offer as against 27 million shares it had offered to buy.
    
"With the offer being oversubscribed, UB Group, owner of Kingfisher Airlines, will buy the shares on a pro-rata basis, which meant that eight million shares would be rejected," a company spokesperson said.
    
UB Group had bought 26 per cent stake in Deccan Aviation, the company which runs Air Deccan, for Rs 550 crore in May. That necessitated it to make an open offer for buying 20 per cent stake as per SEBI's takeover rules. UB Group's stake in Deccan Aviation would now increase to 46 per cent.
    
The offer opened on September 12 and closed on Monday. The open offer was also made at Rs 155, the price that Mallya had paid per share when he bought 26 per cent stake. The 20 per cent stake would cost UB Group about Rs 400 crore.
    
Earlier on Monday, Mallya said at a press conference he had received offers for 20 million shares. However, the number shot up within hours as a large number of institutions submitted their shares at the last minute.
    
Mallya was here to launch an airline corporate charge card programme in collaboration with American Express that will give 8 per cent rebate to small and medium sized firms using Kingfisher Airlines for travel.
    
Despite the aviation industry making losses, Mallya said he was bullish as the industry was growing at 40 per cent.
    
"Otherwise, I would not have spent Rs 1,000-crore on buying stake in Deccan Aviation," he said.
    
The industry made losses in the last few years as there was over-capacity and some airlines were charging ridiculously low fares, he said.
    
Kingfisher and Air Deccan together own 75 aircraft, making it the third largest airline group and second-largest private carrier in the country. Public sector carriers Air India and Indian Airlines merged to become the largest airline with over 100 aircraft, while private firm Jet Airways recently acquired Air Sahara.
    
Mallya said airfares would go up given the rise in the cost of aviation fuel. But he did not indicate as to when the airline would jack up its prices. Mallya said he has identified SME as an important segment for growth of the airline business.
    
Referring to his recent acquisition of a controlling stake in Epic Aircraft, a US-based aircraft manufacturing company that makes private business jets, Mallya said business jets constituted an attractive market. Epic had a good product range and there was a huge financial opportunity in the business, Mallya said.

 

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement