Texas Pacific, 2 PE firms eye Air Deccan stake

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P R Sanjai / Mumbai April 8, 2007
The US-based private equity firm Texas Pacific group, among three others, is in talks with country’s second largest airline Air Deccan for picking up a minority stake.

Sources said the low fare airline is planning to raise around $100 million by diluting 5 to 7 per cent stake to private equity players. Air Deccan has mandated Edelweiss Capital for raising funds which would be utilised for expansion.

“Edelweiss has shortlisted three to four players who are willing to invest in Air Deccan. A deal is likely to be signed in next 10 days. Among four players, Texas Pacific has emerged as aggressive player,” the sources said.

Texas Pacific, which has made investments in airlines globally, had dropped its plans to invest $30 million in the Delhi-based budget carrier SpiceJet owing to differences in valuation.

A senior Air Deccan executive declined to comment on the issue.

Operating 43 aircraft, Air Deccan has the largest network in India covering 61 airports, plying over 300 flights a day.

As on December 31, promoters of the airline hold 22.13 per cent of stake, while the public, including the ICICI Venture-promoted India Advantage Fund-1 with 14.22 per cent and the UK-based Investec Bank with 1.96 per cent, holds remaining stake.

SpiceJet has raised nearly Rs 300 crore from private equity firms, while the Chennai-based Paramount Airways managed to get over Rs 80 crore. Meanwhile, the Vijay Mallya-promoted Kingfisher Airlines and Jet Airways are in talks with private equity for raising funds.