UB starts talks with FIs to fund Deccan take over

NEW DELHI:  Vijay Mallya-promoted UB Group, which has acquired 26 per cent stake in Air Deccan for Rs550 crore and is to buy another 20 per cent through an open offer, has initiated talks with financial institutions to fund the takeover.

UB Holdings has only four weeks time to tie up funds and the process of talks with financial institutions have begun, said UB Group Chief Financial Officer Ravi Nedungadi.

"In another three week's time, we should be able to finalise," he said, however, declining to name the financial institutions the group was currently talking to.

Last week, Mallya's UB Group paid an advance of Rs 150 crore toward the 26 per cent stake -- which would be through an issue of 96,77,419 fully paid-up equity shares.

The remaining amount would be paid to Air Deccan's promoter Deccan Aviation Ltd in the coming four weeks. The transaction had valued Air Deccan at Rs 155 a share.

Asked about market reports on Anil Ambani Group's interest in picking up stake in Kingfisher Airlines, he said there was no such development.

"We are not talking to them nor they have approached us. We are talking only to financial institutions," he added.

UB Group's acquisition of stake in Deccan Aviation will make Kingfisher and Air Deccan formidable opponents of Jet Airways, which took over Air Sahara, and the merged entity of Air India and Indian.

Kingfisher and Air Deccan will have a combined fleet of 71 aircraft and 70 destinations and would have over 30 per cent of the Indian aviation market. PTI