Financial Daily from THE HINDU group of publications
Wednesday, Nov 16, 2005
Financial Daily from THE HINDU group of publications Wednesday, Nov 16, 2005 |
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Corporate
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Mergers & Acquisitions Logistics - Airlines Kingfisher wants to do own due diligence of Air Sahara — `Valuation is too high' K. Giriprakash
Bangalore , Nov. 15 AIR Sahara's move to sell part of its stake to raise capital has received a jolt with Kingfisher Airline stating that it wants to carry out its own due diligence as it believes that the current valuation is too high. Responding to the information memorandum sent out by Air Sahara, the Vijay Mallya-owned airline in a letter said that it does not agree with the valuation given out in the memorandum. Hence, it wants to carry out its own due diligence before taking a decision on buying a stake in airline. Air Sahara had set October 30 as the deadline for receiving a response from Kingfisher Airlines. A top Kingfisher Airline official told Business Line that the valuations are too high and that plans to acquire stake in Air Sahara was no longer high on its list. "They have unrealistic expectations," the official said. He said it does not seem any longer a good proposition to buy stake in an airline, which may not bring value to the company. Air Sahara is yet to respond to the letter sent out by Kingfisher Airlines. Adviser to Air Sahara, Ernst & Young, had put the airline's enterprise value at $750 million to $1 billion. Sources in Air Sahara had earlier said a proposal had been sent to Kingfisher and it had until October 30 to respond. Air Sahara, which launched its operations in 1993, has a fleet of 26 aircraft and also operates international flights to Singapore and Sri Lanka and has code sharing agreement with American Airlines. The airline is part of the Sahara Group with interests in finance, housing, power and television industries.
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