Stake sale to raise $100mn for Air Deccan

Bangalore: Air Deccan, India's largest low cost carrier, plans to divest up to 26 per cent stake to a professional investor, managing director, Capt GR Gopinath, said on Tuesday. The divestment is expected to raise up to $100 million, which would be utilized for the company's expansion plans.

The company has appointed investment bank Edelweiss Capital to evaluate at least three potential private investors, Capt Gopinath told AFP in Bangalore.

According to Capt Gopinath, the airline may divest between 15 and 26 per cent of its stake, and use the $75 -$100 million proceeds to fund expansion plans. In a short span of three and a half years the Bangalore-based airline has already become the second-largest airline in India's increasingly crowded skies.

Capt Gopinath also forecast that the airline, which already commands about 22 per cent market share, would overtake nearest rival, Jet Airways, as India's largest carrier in two years. This, he said, would occur "by offering the best low-cost product" and also by building up infrastructure, from hangars to aircraft inventories.