Modiluft Finds A Saviour In Goan Businessman
The S K Modi-promoted ModiLuft has at last found an investor to bail it out of troubled times. Goa-based businessman and the new owner of Damania Shipping, J E Franklin, has agreed to pump into ModiLuft approximately Rs 100 crore to get the airline off the ground.
While details are still being worked out, Franklin is expected to offer Modi soft loans to get the airline running by paying for some of payments which is due to companies like UK Air. The UK firm has been holding back two Boeing 737s leased to ModiLuft during happier times.
A memorandum of understanding to this effect was signed between Modi and Franklin late last month. The final shape of our association with J E Franklins company will emerge only next month when an agreement will be signed, ModiLufts chairman, S K Modi, said on Thursday. He also confirmed that the airline is negotiating with a Geneva-based non-resident Indian for additional fundings and has sought the directorate general of civil aviations (DGCA) permission to become a scheduled operator. This will help the grounded airline operate flights from February.
The clearance for a General Electric Cap loan is awaited by the airline. The US-based companys Indian arm had sent a favourable report to its headquarters last November on the feasibility of investing in ModiLuft.
GE Cap is believed to have shown an interest in underwriting ModiLufts $60 million GDR, the okay for which was received from the government and the Reserve Bank of India late last year.
If all goes well, ModiLuft will start flying once again from February 1, Modi said. He, however, refused to divulge the name of the Geneva-based NRI. I will not divest my stake in ModiLuft, he said. If the investors wish they can issue fresh equity, he added
ModiLuft plans to start flying with three 400-seater Boeing 737s. It has about a fortnight back sought the DGCAs permission to commence operations, Modi added. However, aviation sources indicated that the airline has to fulfill all the conditions they had agreed upon when they were first granted licence by the DGCA.
With no flights operating since October, following its break up with Lufthansa last year, ModiLuft has been trying to woo prospective investors.
At one time there were talks of the Ambanis, NRI Suresh Nanda, Parvez Damania and yesteryears actress Mumtazs husband Mayur Madhvani pooling in resources for ModiLuft. Nanda, a nominated member on the ModiLuft board, has already picked up about five per cent stake in the company from the market.