The Hindu Business Line : ‘Air Deccan, Kingfisher merger may take time’

The proposed merger of Kingfisher Airlines and Air Deccan could take another two to three months, the promoter of Air Deccan, Captain G.R. Gopinath, said on Wednesday.

Speaking to newspersons here, Capt. Gopinath said that the merger has to be approved not only by the two boards, but also by the independent directors, institutional investors and other shareholders.

The four independent Directors on the Air Deccan board include former tennis star Mr Vijay Amritraj, Prof Thiru Narayan from Indian Institute of Management, and Mr A.K. Ganguly, former Managing Director, Nabisco, Malaysia.

“There are several statutory issues that need to be sorted out before the merger can go through. All this will take some time,” he added.

Among the issues that need to be resolved is the share swap ratio for transfer of shares of one airline to another.

“The share swap ratio can be decided only after some valuation is done of Kingfisher Airlines, which is not a listed entity, and this has to be agreed to by the board. Finding the valuation of Air Deccan, a listed company, is not difficult.

“Besides, the board of Air Deccan has to give an in-principle approval for the merger before it can go through; the final approval can come only after a meeting of an EGM.

At the moment, it looks like it would have to be reverse merger with Kingfisher merging into Air Deccan,” a senior Air Deccan official said.

Asked on what deal was signed on May 30 between Deccan Aviation and UB Group, Air Deccan officials said that UB Group agreed to invest Rs 550 crore in Air Deccan for which additional shares in the airline company were issued.

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