Mumbai/New Delhi: Reliance Industries will dilute its stake in freight services firm Deccan 360, which is battling rising operating costs and low business volumes.
Deccan 360, owned by GR Gopinath, who founded India's first budget airline Air Deccan, has grounded its air cargo service and scaled down its surface transport operation, as it tries to put the brakes on plummeting fortunes.
"They (Reliance) have conveyed that they would not like to invest further but are morally and otherwise supportive of the business venture. They have also said that they will not mind a dilution of their stake if any other player wants to come and partner," Deccan 360's chief executive HL Rikhye said.
Reliance, controlled by billionaire Mukesh Ambani, had invested over 100 crore in the firm in April last year, hoping to boost the supply chain and logistics operations for its retail business. Gopinath, Deccan 360's chairman and managing director, had said the investment was between 26% and 50%.
Officials close to Reliance said the company could sell its entire stake if it got a good buyer, as Deccan 360 had failed to achieve certain milestones necessary for a fresh round of funding. Deccan 360's dwindling business has lead to accumulated losses of 200 crore.
15/06/11 Manisha Singhal & Ratna Bhushan/Economic Times
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