Kingfisher gets to fly abroad with Deccan

Bangalore/New Delhi/Mumbai: Ending months of speculation, Kingfisher Airlines and low-fare carrier Simplifly Deccan will merge into one corporate entity in the next four months, allowing both brands to fly coveted overseas routes come August.
Kingfisher’s owner and UB Group chairman Vijay Mallya, speaking after a board meeting of Simplifly Deccan’s parent Deccan Aviation Ltd, said Deccan Aviation will be renamed as Kingfisher Airlines Ltd and will become a subsidiary of UB Holdings Ltd. Kingfisher will be the listed entity. The group has appointed consultants KPMG and Dalal & Shah to iron out merger details as well as a share swap ratio in the next six weeks.

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Deccan-Kingfisher combine
to look at share sale
Mumbai: The combined operations will
need about $250-300 million over the
next two quarters and it may look at
private placement of shares, UB group
Chief Financial Officer Ravi Nedungadi
said."The two board's have taken a
decision. The legal process will take
anywhere between 4-6 months. From
an organisational point of view the
integration is already on the fast track,"
he said."The merger will be structured
in such a way to allow us to carry forward
the accumulated losses," Nedungadi
said. The two airlines have a combined
loss of about 20 billion rupees and this
can be set off against future profits.
20/12/07 Reuters
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Mallya said UB Holdings Ltd will hold more than 51% stake in the new entity, of which he will be chairman and chief executive officer. Deccan founder G.R. Gopinath will be vice-chairman and also head the charter business of both Deccan and Kingfisher, which will be separated and operated as a single entity.
“Both Kingfisher and Deccan will operate as distinctive brands,” said Gopinath. He said they have already filed with civil aviation authorities to fly international routes with Deccan flying to West Asia and South-East Asia, while Kingfisher will fly long-haul sectors, such as to the US.
“It will be complementary,” insisted Mallya.
20/12/07 K. Raghu, Tarun Shukla and P.R. Sanjai/Livemint

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Categories: Kingfisher Dec 2007, Simplifly Deccan Dec 2007