GoAir plans to offload 26% stake in LCCs

Mumbai: Wadia Group firm GoAir is believed to have resumed negotiations with potential players for a 26% stake in the low-cost carrier.
Sources close to the development say GoAir has been vetting some proposals for a joint venture by diluting a minority stake and a final decision would be taken soon.
The airline, according to them, has already sent out feelers for a joint venture partner due to fund crunch and rising losses.
Market sources said GoAir has received proposals from private equity (PEs) players, high net worth individuals (HNIs) and foreign institutional investors (FII), wanting to pick up a stake in the airline.
Investors and analysts are putting the enterprise value around $100 million. It is not clear whether the stake sale will be out of promoter equity or fresh equity will be issued.
Mumbai-based GoAir, which currently operates 59 flights across 11 destinations, is in deep financial crisis. Hard hit by rising costs, the smallest low-cost carrier in the country is losing Rs 1 crore every day. It has decided to prune its aircraft acquisition plans from 18 to 10 by 2009.
26/06/08 Mithun Roy/Economic Times

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Categories: GoAir Jun 2008