UB Group completes fund raising for Air Deccan buy

Vijay Mallya-promoted UB Group, which acquired 26 per cent stake in Air Deccan for Rs 550 crore (Rs 5.5 billion) and is to buy another 20 per cent through an open offer, has completed raising funds for the purpose ahead of its payment deadline.

Group Chief Financial Officer Ravi Nedungadi told PTI that the funds were raised from a single domestic source. "We have been fully funded by a domestic Indian institution. No co-investor," he said.

He, however, declined to disclose the identity of the institution. In May, UB Group had agreed to buy 26 per cent stake in Air Deccan and paid an advance of Rs 150 crore (Rs 1.5 billion) towards the purchase - which would be through an issue of 96,77,419 fully paid-up equity shares.

The group was given four weeks' time to pay the rest of the amount. After the 26 per cent stake acquisition completes, UB Group will have to make the mandatory open offer to the shareholders of Air Deccan for up to 20 per cent stake.

UB Group's acquisition of stake in Deccan Aviation will make Kingfisher and Air Deccan formidable opponents of Jet Airways, which took over Air Sahara, and the merged entity of Air India and Indian.

Kingfisher and Air Deccan will have a combined fleet of 71 aircraft, flying to 70 destinations and would account for over 30 per cent of the Indian aviation market.