Saturday, June 2, 2007

Mallya flies deccan

United Breweries (Holdings) Ltd would buy 26 per cent in Deccan Aviation Ltd for Rs 550 crore, UB group chief financial officer and president, Ravi Nedungadi, said on Thursday.
The UB Group would make an open offer for 20 per cent more in Deccan at Rs 155 a share, he said.
G.R. Gopinath would continue as chairman of Deccan Aviation, he added.

Shares of both Deccan Aviation and UB Holdings today surged nearly 10 per cent in early morning trade on the Bombay Stock Exchange after Vijay Mallya's UB Group acquired 26 per cent in the low-cost carrier for Rs 550 crore.
air deccan

The scrip of Deccan Aviation jumped Rs 13.80 to touch a high of Rs 160 on the Bombay Stock Exchange (BSE) and over 17.24 lakh shares exchanged hands on the bourse. The shares opened firm at Rs 151 in the morning, surged 9.43 per cent, and were trading at Rs 151.55, up 3.66 per cent on the BSE at 11.12 am.

The acquisition will help Mallya consolidate his position in tandem with his Kingfisher Airlines, Air Deccan will have a 32 per cent market share, ahead of the Jet Airways-Sahara combine, which has a market share of 30-31 per cent.

‘‘Deccan brings a huge network and helps us consolidate the industry. The fundamental problem with the industry was that it was splintered with a large number of players. With this combination, we will have two or three big players with significant shares,’’ UB group president and CFO Ravi Nedungadi said.

The two companies together would have a fleet of 71 aircraft, 70 destinations and 33 per cent market share, Air Deccan Managing Director G R Gopinath said, who would continue as Executive Chairman of the Board, while Mallya would be the Vice Chairman.
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