Kingfisher Air to raise $100-150 mn

Kingfisher Airlines is planning to raise $100-$150 million through private equity route within the next one year, if its plans for an initial public offer (IPO) does not work out.

Ravi Nedugadi, president & CFO, UB group said: "The general perception in the business is that one should raise money when the markets are healthy and we feel it is healthy now. If plans for the IPO over the next year is not possible, we plan to raise $100-$150 million through private equity. There are lot of firms willing to invest in the company and we are yet to finalise the details."

He added that the percentage of equity to be divested for raising that amount of money is also to be finalised.

Kingfisher Airlines has five aircraft in operation and this number is expected to reach 11 by February 2006. The airline at the recent Paris Airshow placed firm order for five Airbus A380s, the largest aircraft ever made.

This is despite the fact that no Indian airport is equipped to receive this aircraft. Also, its price is yet to be disclosed. The company also ordered 10 other Airbus aircraft - five A350-800 and A330-200 each - in a deal totalling $3 billion.

The company so far has been funding all its requirement from internal accruals and through some debt. If the company decides to go in for a private equity deal, it will be the third such deal in the recent airlines' rush to rainse funding. Air Deccan and Spice Jet raised $40 million and $20 million respectively.

The UB Group had divested its holding in Bayer LifeSciece for Rs 36 crore to part finance the Rs 60 crore seed capital required for Kingfisher Airlines.