The Hindu Business Line : Air Deccan board to decide on shedding stake to UB

Bangalore June 21 The Deccan Aviation board will take a decision on which promoter should sell stake in case the open offer by UB Holdings fails to mop up the required 20 per cent stake.

While UB Holdings is keen to buy 20 per cent more in the company, in addition to the 26 per cent it already owns in Deccan Aviation, there is a possibility that the investors will leave the decision to divest their individual stakes with the company's Chairman, Mr G.R. Gopinath, to make up the numbers.

Analysts said that there is every possibility of UB Holdings being able to pick up an additional 20 per cent stake through the open offer route, but in case it is not able to do so, the decision will be left to Mr Gopinath on whether any more stake should be given and if so, who should be asked to do so. However, none of the investors need to seek either the board's permission or that of Mr Gopinath to divest their stakes.

The UB offer opens on July 25 and ends on August 13.

In another development, Mr S.L. Ladhani, who acted as an angel investor for Deccan Aviation, told Business Line that he would back any move that will make the airline profitable. The Deccan Aviation board is expected to meet on June 26, the first after UB bought 26 per cent stake in the company.

"I am willing to support anyone, be it Mr Gopinath or Mr Mallya, as long as the airline starts making profits. It is time to stop the leak. We have been losing money for a long time."

Mr Ladhani and his family members hold 11.38 per cent stake in the company.

It is of interest to note that the lock-in period for Mr Ladhani and his family members ended on June 2.

Except the main promoters - Mr Gopinath (10.92 per cent), Mr Vishnu Rawal (2.86 per cent) and Mr K.J. Samuel (8.33 per cent) - all other investors can subscribe to the issue as their lock-in periods too have expired.

While institutions like ICICI Ventures do not have a lock-in period that for Capital International also ended on June 2.

Mr Ladhani said that an increase of Rs 500 in fares does not mean the airline will shed its low-cost model.

He added that while Mr Gopinath will continue to be Chairman, the new COO, a "foreigner who is about to be appointed," will run the day-to-day operations of the airline.

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