UB raises Rs 1,000 cr for Deccan stake

UB Group, which has raised close to Rs 1,500 crore debt for keeping Kingfisher Airline in the skies during the past two years, has raised another Rs 1,000 crore debt to fund the 46 per cent buy in Deccan Aviation.

Speaking to Business Standard, UB Group President and Chief Financial Officer Ravi Nedungadi said: "UB Group has consistently raised large amount of debts since the past 15 years. For the aviation business, too, we have so far raised around Rs 1,500 crore debt and have added another Rs 1,000 crore debt to fund the 46 per cent stake in Deccan Aviation."

The debt for the 46 per cent buy in Deccan Aviation has been raised in two phases. In the first phase, for the 26 per cent negotiated deal for Rs 550 crore and the subsequent 20 per cent open offer which cost UB Group Rs 425 crore.

According to industry information, financial institutions such as IDFC and ICICI were prominent lenders to UB Group.

Nedungadi, however, declined to name the FIs in the deal. "There is immense amount of cash available in the market. A host of FIs have been happy over our past record and they have funded this debt," he added.

Post-Deccan buy, the Kingfisher-Deccan combine will be the largest domestic airline in India controlling 32 per cent market share with a fleet of 71 aircraft, including 41 Airbus aircraft and 30 ATR aircraft.

He said: "We are of the view that in the next two years, our aviation business will continue to draw in cash through debt and internal accruals and we do not foresee any equity deals."