With just two days left to make payment for its acquisition of 26 per cent stake in Air Deccan for Rs 550 crore (Rs 5.5 billion), Vijay Mallya-promoted UB Group on Tuesday said it has received shareholders' approval for the deal and has put in place an escrow mechanism to complete the transaction.When contacted, a group spokesperson said an Extraordinary General Meeting of shareholders, held on Tuesday, gave UB Holdings the go-ahead to complete the process.
"The funding has been fully tied up and an escrow mechanism is in place. Post-EGM, which is being held today, the documentation is in process for concluding the transaction," the spokesperson said.
UB Group Chief Financial Officer Ravi Nedungudi had recently said Rs 400 crore (Rs 4 billion) was raised from "one single transaction" to make payments for buying Air Deccan stake.
Besides the 26 per cent, UB Group would buy another 20 per cent through an open offer. UB Group had on May 31 agreed to buy 26 per cent stake in the low-cost carrier and paid an advance of Rs 150 crore (Rs 1.5 billion) towards the purchase. The group was given four weeks to pay the remaining amount.
The group's acquisition of stake in Deccan Aviation [Get Quote] will make Kingfisher and Air Deccan formidable opponents of Jet Airways [Get Quote], which took over Air Sahara, and the merged entity of Air India and Indian.
Kingfisher and Air Deccan will have a combined fleet of 7 aircraft, flying to 70 destinations and would account for over 30 per cent of the Indian aviation market.
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