PE players not keen on Indian skies?

India is the fastest growing aviation market. It needs USD 20 billion in the next 3 years and Jet and Kingfisher have emerged as the largest players. Yet private equity players shy away from investing in them, reports CNBC-TV18.
"We have not done a private equity deal because I am very particular about the value. I will not dilute any stake in Kingfisher unless I get the right value,” says Vijay Mallya, Chairman of Kingfisher.
And two months after Vijay Mallya said this to CNBC TV18, it still seems to be true. Kingfisher has been in negotiations with various private equity firms but no deal has been struck yet.
Sources say valuations are the primary bone of contention. Private equity players are giving Kingfisher Airlines valuations of USD 700 to 800 million while Mallya is believed to be expecting in excess of a billion dollar for Kingfisher alone. Add to this Air Deccan and his expectations go beyond USD 1-and-a-half billion. That's an entity PE players value at about 1.2 billion at best.
A similar deal is stuck at the Jet Airways and sources say that Goyal is keen to divest upto 49% in Jetlite, which is in desperate need of money to turn around.
26/07/07 Moneycontrol.com

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Categories: General Aviation Jul 2007