Captain G R Gopinath's Deccan 360 to lay off jobs

Bangalore: Deccan 360, the logistics firm launched by India's budget airline pioneer Captain G R Gopinath, has asked its employees to start looking for jobs elsewhere. In an email to its 600-odd staff, a copy of which was seen by ET on Friday, the HR department of Deccan 360 cited lack of funds as the reason for this restructuring.
"While we have done our best to hold the company with the minimal operations, but could not succeed due to business and funding constraints. Hence, we opted for restructuring and are in the process of discussing with investors and lenders," the email said.
In April last year Gopinath raised Rs 110 crore from Reliance, most of which is already gone, according to the company insiders. According to a May article published by Forbes Magazine , Deccan 360 had revenues of Rs 43 crore during year ending July 2010 and losses of nearly Rs 200 crore. However, according to Gopinath, the energy-to-telecom behemoth is now reluctant to up its stake in the business, largely due to the fact that it plans on focusing on core sectors such as telecom and retail, which it has identified as more critical to its growth. Further, a raise in stakes will also mean that Reliance will have to assume management control in Deccan 360, a position it does not want to be in.
Hence, the search for a third investor. However, there is no clarity yet that once additional investors are identified, Gopinath and Reliance will exit the venture. The communique also stated that the company is currently working on a deferred salary plan for remaining employees, and as and when funding becomes available, the employees choosing to leave immediately, will be paid their outstanding amounts.
09/07/11 Biswarup Gooptu & Sobia Khan/Economic Times

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Categories: Cargo Jul 2011, Deccan 360 Jul 2011