Deccan stake sale may force Gopinath to step down

Mumbai: Deccan Aviation, the company that owns budget carrier Air Deccan, may see a change in management once it ropes in a new strategic investor like the Texas Pacific Group or the Anil Dhirubhai Ambani Group.
Deccan is trying to raise $100 million (Rs 407 crore) and may need to dilute 25-26 per cent of its equity in favour of one of these investors, who will emerge as the majority shareholders in the company and may like to have his own CEO.
Gopinath and his associates’ own 22 per cent stake, which may come down to 16.5 per cent post-equity dilution, say industry analysts. A lot would, however, depend on the way Deccan structures the deal: it could issue new shares to the investors, some existing shareholders could sell out, or it could do both.
Gopinath could not be reached for comments but reports in the media suggest that he’s keen to continue. But analysts say Gopinath doesn’t have an option but to cede control.
23/05/07 Ranju Sarkar/Hindustan Times

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Categories: Air Deccan May 2007