The Hindu Business Line : UB offer for Deccan opens on Sept 12

Mumbai, Sept. 8 The UB Group’s open offer to the public for acquisition of Deccan Aviation shares (Air Deccan), will now open on September 12, nearly seven weeks after the date (July 25 ) originally announced. The revised completion schedule for the open offer has now been filed with the Securities and Exchange Board of India (SEBI).

As per this revised schedule, the offer will commence on September 12 and close on October 1. The payment for the quantum of shares accepted will be communicated by mid-October.

The UB Group’s open offer had hit a roadblock after the acquirers (UB Group) failed to furnish a declaration that it had made firm financial arrangements for funding the open offer. In the event, SEBI objected to the merchant banker informing the stock exchange in July that SEBI had not cleared the draft offer document. SEBI then said that the question of going ahead with the open offer did not arise when the acquirer (UB Group) had not yet made firm financial arrangements for the purchase.

The open offer involves acquisition of a maximum of 2.71 crore shares at a price of Rs 155 each. The total fund requirement was estimated at Rs 420 crore approximately.

The revised offer document now confirms that the company has since deposited Rs 360.47 crore in the escrow account to be operated by the merchant banker to fund the acquisition. In addition, it has furnished a bank guarantee issued by Standard Chartered Bank for Rs 60 crore thus covering the full cost of acquisition.

rupee term loans

The UB Group has raised rupee term loans of Rs 500 crore in two tranches from IDFC repayable after three years at an interest rate in the region of 14.5-14.8 per cent. The loan was utilised to finance the preferential offer of shares made by the airline.

Related Stories:
UB Holdings’ open offer for Air Deccan yet to get nod
UB Holdings will fund Air Deccan equity acquisition
UB open offer in Air Deccan: SEBI clears the air
Vijay Mallya lands 26% stake in Deccan Aviation

More Stories on : Airlines | Open Offers | Mergers & Acquisitions

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