The Hindu Business Line : Deccan Aviation to float IPO to pay off debts

DECCAN Aviation has said it is floating an IPO to pay off its debts, set up a hangar and infrastructure in various airports, which will cost the company around Rs 300 crore.

In its draft red herring prospectus, the company said it had incurred a total loss of around Rs 113 crore, so far, and its net worth was negative. The prospectus said the company is going public to raise funds for setting up a training centre worth Rs 65 crore and a hangar, which will cost Rs 40 crore. It will also require around Rs 17 crore for setting up infrastructure at various airports and will require around Rs 133 crore for debt repayment. Post-IPO, the stake of one of its three main promoters, Capt G.R. Gopinath who is also the Managing Director, will reduce to 11.15 per cent from 14.87 per cent; and that of Capt K.J. Samuel will reduce to 8.5 per cent from 11.34 per cent and that of Mr V.S. Rawal will reduce to 2.92 per cent from 3.89 per cent. The stake of private investors, which include, ICICI and Capital One will reduce to around 27 per cent from 38 per cent.

As per an agreement, if the company is able to achieve certain milestones within a period of three years, both the investors together will return between 8 per cent and 9 per cent of its total stake to the original shareholders, post-IPO.

In its prospectus, the company said the registration of the name of its airline, Air Deccan and its tag line, Simplify, is pending before the Assistant Registrar's office in Chennai.

Deccan Aviation has earmarked 25 per cent of its shares for the public and FIs.