Air Deccan to raise $100mn by selling stake

BANGALORE: Budget airline Air Deccan plans to raise $100mn by selling up to a 26 per cent stake to a professional investor, Managing Director G R Gopinath said on Wednesday.   

The company has appointed investment bank Edelweiss Capital to evaluate at least three potential private investors, Gopinath said, ruling out a strategic sale to Vijay Mallya's Kingfisher Airlines.   

"We are taking time to find out who we should go to bed with," the 55-year-old entrepreneur said, adding a final decision that could involve a sale to more than one player will be made in two weeks to a month.   

The three-and-a-half-year-old company may sell between 15 per cent and 26 per cent of itself, he said, and use the $75-100mn proceeds to fund expansion.   

The Bangalore-based firm is trying to cement its place as the second-largest airline in India's increasingly crowded skies. Mallya, who owns the world's third-largest distiller in UB Group, said earlier this month that he is interested in buying Air Deccan.   

Gopinath, who spurned the overture saying a marriage between the two airlines didn't make business or cultural sense, again ruled out a sale to Kingfisher, likening Mallya to "a kid in a toy store" who wants to buy everything in sight.   

"It was very presumptuous on his part," said Gopinath, whose praise of Mallya at the ensuing second-anniversary celebration of Kingfisher raised speculation that he may have changed his mind.   

Not only were he and Mallya "totally different people" but their visions and culture didn't match, said Gopinath.