Modiluft Roadshows For Pref Issues Ready For Take Off

Modiluft has announced the launch of the road shows for its $50 million preference share issue in order to raise funds to relaunch the airline in co-operation with British Airways Plc.

The road shows accompanied by senior Modiluft executives is planning to travel to Europe, Middle East, Canada and the United States.

This was finalised at a Modiluft management committee meeting to discuss strategic issues in London, a company release said.

The share is expected to have a face value of Rs 100, sources said.

The airline plans to commence operations with 3-4 Boeing 737-400s and proposes to expand to a fleet of 12.

 

Its is currently in dialogue with a few companies for lease of aircraft.

However, the fate of the airline is not clear since the ministry of civil aviation has not yet given its clearance to the venture.

Modiluft's plans to restart its operations in "co-operation" with British Airways have been under cloud with the union civil aviation minister C M Ibrahim arguing that it violates the existing civil aviation policy.

It has been alleged the proposal to float $50 million in convertible-preference equity indirectly involves foreign equity from a foreign airline, in this case British Airways.

Though, the proposal has already been cleared by the Foreign Investment Promotion Board (FIPB), the intervention by the minister duo has put the entire venture in doubt.

Modiluft's old license has expired and it is seeking a fresh no objection certificate from the aircraft acquisition committee and the ministry which also grants the license to operate, sources explained.

Modiluft has its network of offices, computerised reservations systems, ground systems and other infrastructure in place in key Indian cities and will re-launch at a early date, the release added.