Vijay Mallya bought Air Deccan with his eyes closed. His team never went through the books of the loss making Air Deccan before Mallya agreed to buy it for a total consideration of Rs crore in At least that is what the book, called "The Vijay Mallya story" suggests. Written by senior journalist K Giriprakash, the book also speaks of how Mallya rushed into the airline business with Kingfisher Airlines, despite his close associates warning against the move. Kingfisher was to be a gift to son Siddharth Mallya on his eighteenth birthday on May 7,
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The merger will create the largest player in the domestic aviation market and pave the way for Vijay Mallya to fly his Kingfisher Airlines to overseas destinations. Deccan Aviation will subsequently be renamed Kingfisher Airlines. Both the airlines are in the red. While Deccan Aviation reported a loss of Rs crore for the year ended June 30, , Kingfisher Airlines had a loss of Rs crore on its books for the year ended March 31, The new firm will operate two separate brands — Deccan and Kingfisher — and will retain their identities of being a low-cost carrier and a full-service airline, respectively.
Addressing the media after the board meetings, Mallya said that the new firm will kick off by early next fiscal. This process of merger has been a result of Kingfisher Airlines recently acquiring 46 per cent in Deccan Aviation through a two step process.
First, Kingfisher Airlines acquired 26 per cent in Deccan Aviation and then made a public open offer for shareholders of Deccan Aviation. UB Holdings collectively spent around Rs 1, crore for this acquisition. Mallya, who has been lobbying hard with the government to let him fly abroad before his airline completes five years of domestic operations, would get what he wanted through this strategic move. From August , the merged firm will have a right to fly overseas.
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Kingfisher buys large Air Deccan stake
MUMBAI Reuters - Deccan Aviation Ltd will merge the scheduled airline operations of unlisted Kingfisher Airlines, to create one of the biggest air carriers in the country and pave the way for the latter to fly overseas. R Gopinath and the UB group, Deccan said. The combined entity will operate the two brands — Deccan, a low-cost airline, and Kingfisher, a full service carrier, Nedungadi said. The legal process will take anywhere between months.
Kingfisher buys control of Air Deccan
Air Deccan, India's largest low-cost carrier, has been running short of cash and had been seeking an investment partner to provide more funds to help it continue with its ambitious expansion programme, which includes adding dozens of new Airbus Afamily and ATR turboprop aircraft. The marriage is an unlikely one, as Kingfisher is a full-service carrier while Air Deccan is a strict no-frills operator. Kingfisher and UB Group chairman Vijay Mallya has said many times that he believes no-frills carriers cannot be successful in India. Gopinath, one of Air Deccan's founders, says the deal was agreed only after he was satisfied that Mallya would not take full control. But how long Air Deccan will be able to remain independent is an open question, as UB Group has only said it will maintain separate operations for Air Deccan and Kingfisher for "the near future". Mallya also told Airline Business at the IATA annual general meeting in Vancouver that he expects to secure majority ownership of Air Deccan through the public offer he will soon be making.
Deccan-Kingfisher combine to look at share sale
This is despite the fact that on the face of it, both the airlines, leave alone the personalities of their promoters, differ as chalk as cheese! If Air Deccan was positioned for the masses, Kingfisher Airlines is unabashedly for the classes. Both cater to different segments of the society and have different models. And hence their marriage appeared to be a recipe for disaster.
Mergers are called amalgamations, while Takeovers are acquisition of a part of equity capital of a company that enables the acquirer to exercise control over the affairs of the company. Aviation consolidation looming in India : Outlook , Report released, March 7, , accessed on January 10, www. Media center, 23 February, accessed on January 5, www. User Username. Remember me. Notifications View Subscribe. Powered by.