| Merged entity to be named Kingfisher Airlines.
|
| |
| The Kingfisher Airlines-Deccan Aviation merger swap ratio has been fixed at 7:3. This means shareholders in the UB group-promoted Kingfisher Airlines will receive three shares of Deccan for every seven shares that they hold.
|
| |
| Deccan Aviation's name will be changed to Kingfisher Airlines and the merger will be effective from April 1, 2008, subject to statutory approvals.
|
| |
| The merger of Kingfisher Airlines with Deccan Aviation moved a step closer to its conclusion today with the Deccan Aviation board approving the merger and the share swap ratio after a board meeting in Bangalore.
|
| |
| According to the management of Deccan, the share entitlement ratio was determined on the basis of independent valuations by KPMG and Dalal and Shah.
|
| |
| The Deccan-Kingfisher combine commands a market share of just over 29.3 per cent (source: DGCA) and accounts for 50 per cent of deployed capacity in the south. Jet Airways together with JetLite have a marginally higher market share of 29.9 per cent.
|
| |
Deccan losses
For the quarter ended December 31, 2007, Deccan posted a net loss of Rs 190.86 crore on revenues of Rs 567.63 crore.
|
| |
| Kingfisher had posted a loss of Rs 575.8 crore in FY07, on a turnover of Rs 1,553 crore and it is believed that the airline has accumulated losses of about Rs 1,200 crore, which amounts to a negative net worth of Rs 385 crore.
|
| |
| This financial year, Kingfisher is expected to record a turnover of Rs 3,000 crore, while revenues for Deccan should be in the region of Rs 2,200 crore.
|
| |
| Deccan shares lost 1.81 per cent on the Bombay Stock Exchange on Thursday to close at Rs 173.90.
|
| |
Looking beyond
The Deccan board also approved a proposal for the sale of the charter business of the company to an entity that will be jointly owned by Captain G R Gopinath and the UB Group.
|
| |
| The merger of Kingfisher with Deccan Aviation will allow Kingfisher to fly overseas from May when Deccan completes five years of existence.
|
| |
| This is important as markets like the Gulf region can be lucrative, particularly when there's excess capacity in the home market. There is also a huge opportunity on the India-US route which Kingfisher has been eyeing. |
| |
