Promoters of VRL Logistics today said they plan to start a regional airline.
The chairman of the transport and logistics firm Vijay Sankeshwar alongwith Managing Director Anand Sankeshwar express their intent to enter the new business activity in a letter to the Board of Directors.
"We are currently proposing to enter the civil aviation industry by incorporating a separate company to undertake the business of a regional airline. We have taken this in principle decision after a lot of study and inputs from industry experts," both the promoters said in a letter to the Board of Directors of the company.
They said they intended to promote the new airline and induct a professional management to manage the day to day operations and grow this business.
On financing, the letter said, "We are also internally deliberating on the method of financing of this venture. The board members should note that we may seek to dilute a portion of our present day holding in VRL Logistic Ltd in order to provide us with liquidity to enable our investment for the aviation venture."
At the same time the promoters assured the board that such dilution will be in accordance with the applicable laws while they will continue to hold a majority stake in the company.
Asserting that they were providing information to the board to maintain transparency, the promoters said they have no intent to dissociate from the executive management of the company.
"We will very much continue to function in VRL Logistics Ltd in our executive capacities as we are doing and continue to attend to all our current day to day work as also shoulder full responsibility for the business operations," they said.
They also said that the commencement of such regional airline service will be subject to approvals from the government and regulatory authorities and the communication is only an "in principle" expression of the intent and further steps will be subject to developments like new aviation policy.
VRL Logistics is into passenger and goods transportation business besides is a parcel delivery service provider and has also interests in wind power generation and air charter operations.
Its goods transportation fleet includes 3,872 owned vehicles as of March 2016 while passenger transportation fleet includes 381 owned vehicles.
The company on a standalone basis registered a decline in its net profit to Rs 13.21 crore for the March quarter of the last fiscal as against Rs 19.36 crore in the year-ago period.
