DNA Money
Mumbai / Bangalore, May 18: Has Deccan Aviation managing director Capt G R Gopinath closed in on a financial investor for his budget airline Air Deccan?
On Thursday, the Street was abuzz with a strong rumour that the pioneer of low-cost aviation could be within striking distance of a deal with Reliance’s Anil Dhirubhai Ambani Group (ADAG). Industry sources in the know of Gopinath’s talks with various investors said a final word is still some time away.
“Of what I know, Capt Gopinath’s discussion with ADAG is in advanced stage, but there are still some issues that need to be addressed. Unless those are looked into, we cannot say with certainty whether the deal is happening or not. Captain is also in talks with a couple of private equity firms and overseas corporate investors,” said an industry source.
Gopinath is in the process of raising $75-100 million for the expansion of his business. He has revealed he could dilute between 15 and 26% stake of his airline to a suitable professional (not strategic) investor.
An analyst said the rumour was sparked by Capt Gopinath’s Mumbai visit, from moving on to London.
“London has become his second home. He routinely travels to London. I don’t know why he is going this time. He must be having something up his sleeves,” said Air Deccan spokesperson Vijaya Menon.
Meanwhile, analysts are putting one and one together and speculating that Capt Gopinath could well be opening talks with Kingfisher Airline chairman Vijay Mallya, who, on Wednesday, sealed an acquisition deal with Scottish whisky maker Whyte & Mackay.
Industry sources ruled it out saying “It is not in that connection.” Gopinath has publicly spurned Mallya’s interest in his carrier, saying Mallya should mind his own business.
On Thursday, Air Deccan’s scrip moved up 22.8%, or Rs 11.80, to Rs 145.40. The jump has surprised even the officials of the airline.
“We are planning to shoot off a letter to the BSE to probe into the abnormal spurt in the stock price,” said Menon.
An analyst said Air Deccan shares could have shot up on information of an oral confirmation of a deal.
“Every deal happens in stages. Today, probably one stage must have been completed,” said an analyst.