UB to raise more debt to fund Deccan growth

United Breweries will seek shareholders’ approval to raise more debt to fund Deccan Aviation resulting in Vijay Mallya increasing his investment to 1,500 crore from the present Rs 1,000 crore.
United Breweries (Holdings) is also asking shareholders to approve raising the level of corporate guarantee for its other carrier, full-service Kingfisher, to Rs 7,500 crore from Rs 6,000 crore Passengers can expect fares on the India-UK route to see a steep fall with the government permitting Air Deccan to start flights on this route. It is expected that with daily operations using an Airbus A 330 aircraft, there will be an additional 2,100 seats (about 300 a day) one way across various classes on offer every week.
The average normal fare between India and UK is about Rs 30,000, analysts said that with additional seats and services, this can fall significantly. For example, before the start of private Indian carriers’ operations to UK, the average fare was to the tune of Rs 45,000.
Carriers flew over 25 lakh in and out of India, last month, a growth of over 10% over the previous year.
The approval will help Mallya tap new markets for his aviation business. Mallya’s Kingfisher Airlines Ltd. bought Deccan last year with the discount carrier becoming eligible to start overseas flights this year on the completion of five years of domestic operations.
20/08/08 Financial Express

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Categories: Deccan Aug 2008, Kingfisher Aug 2008