aseem
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Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 9:00 am

Kingfisher likely to pick up stake in Air Sahara:Mallya
New Delhi , Oct. 18

KINGFISHER Airlines is likely to acquire stake in Air Sahara but no decision on the details has yet been finalised, the Chairman of Kingfisher, Mr Vijay Mallya, told reporters here today.

Speaking on the sidelines of the CII meeting on the aviation industry, Mr Mallya said: "Air Sahara is raising equity and we are interested to take a stake. We have signed an Information Memorandum with them prepared by Ernst & Young. We are studying it for a part of the $100-million that Sahara plans to raise."

"According to the memorandum we are to give non-binding offers by the end of October," he said.

Earlier during the meet, the Jet Airways Chairman, Mr Naresh Goel, had denied that Jet is interested in taking stake in Sahara.

Hindu Business Line

I hope I am the first one to post this news.
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LAXDESI
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 1:40 pm

I hope $100 million gets Kingfisher effective management control of Air Sahara.
Another article stated that Sahara is expecting a total valuation of about $700 million. For comparison, Jet Airways was valued at about $2,125 million when it went public. Jet Airways currently has a 41% market share, and Sahara has a 13% market share which is lower than 17% market share it held last year. Based on market share and international flying rights, a valuation of $ 700 million is not out of line. However, it is unlikely that Sahara is as profitable as Jet, and therefore a more reasonable valuation should be about $300 million- even less if Sahara is currently losing money.
 
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AirIndia
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 1:48 pm

Quoting LAXDESI (Reply 1):
Based on market share and international flying rights

They should get approx 300mn $ due to the accompanying intl flying rights.

Interestingly, similar article in Eco Times qoutes VM as saying that there are lot of synergies between S2 and KF.... I wonder what made him say that since they fly different fleets, while KF is an LCC S2 is not etc etc.

The only synergy he sees is the Intl flying right...

However, I trust E&Y to squeeze maximum out of KF if they bid..  Wink
 
QFA001
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 2:02 pm

I'd appreciate the opinion of knowledgable commentators: do you think that this might be Kingfisher's way of accessing international air rights earlier?

 airplane QFA001
 
n1786b
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 4:41 pm

Quoting QFA001 (Reply 3):
I'd appreciate the opinion of knowledgable commentators: do you think that this might be Kingfisher's way of accessing international air rights earlier?

Could it also have something to do with securing enough personnel for their planes? IIRC, there is a shortage of qualified personnel and it will continue for some time.

- N1786B
 
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HAWK21M
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 5:03 pm

Quoting AirIndia (Reply 2):
while KF is an LCC S2 is not

IT [Kingfisher] is not a LCC.

Quoting QFA001 (Reply 3):
do you think that this might be Kingfisher's way of accessing international air rights earlier?

 bigthumbsup 

Quoting N1786b (Reply 4):
Could it also have something to do with securing enough personnel for their planes? IIRC, there is a shortage of qualified personnel and it will continue for some time

The Pilot shortage is being filled by Expats.More AMEs are being trained.That should not be a reason.

regds
MEL
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cricket
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 6:17 pm

According to E&Y Air Sahara is being valued at $800 million-$1billion. Vijay Mallya is not going to pay just $100 million. SRS needs the capital for his massive real-estate push and wants out of the airline business (SRS and VM were introduced by Rajeev Shukla, Congress MP) - if VM does a 51-74% buyout expect the amount to be closer to $400-600 million. Kingfisher would also acquire S2's international route authorities - plus this would give VM's own airline a massive valuation boost - Kingfisher will claim a valuation of around $2 billion when they go public by 2006 - this is a bull market after all. By the way, Air Deccan with a share even lower than that of Sahara will be valued at around $1 billion when they go public in January (26% stake worth Rs 1100 crore goes public, so the company is worth Rs 4400 crore = $1 billion). When Temasek Holdings bought a 6% stake in SpiceJet they valued that carrier at $300 million.
Valuations are go through the roof, however they are all very optimistic. While the BSE 500 has doubled since March, 9W's scrip which listed at Rs 1100 is trading just above listing price. If any of you are looking to invest in airline companies in India, I would urge caution.
A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,
 
spink
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Wed Oct 19, 2005 7:38 pm

Quoting AirIndia (Reply 2):
Interestingly, similar article in Eco Times qoutes VM as saying that there are lot of synergies between S2 and KF.... I wonder what made him say that since they fly different fleets, while KF is an LCC S2 is not etc etc.

Having flown KF a couple of times, I can assure you that KF is not a LCC. Their fares are pretty reasonable, but on board they are as full service as Jet.
 
LAXDESI
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Sat Oct 29, 2005 1:53 pm

An update on Air Sahara valuation in Business Standard, Link:

http://www.business-standard.com/com...lselect=1&chklogin=N&autono=204208

Excerpts:

Air Sahara has reportedly kept the valuation between $750 million and $1 billion. In contrast, prospective buyers are quoting anything between $400 million and $550 million.

According to sources, Jet Airways has quoted around $550 million and could not finalise the deal due to the differences in valuation figures. Kingfisher Airlines’ quote was at $400 million.

The valuation that Air Sahara has fixed is too high. Interestingly, it is going over the roof while earning is coming down drastically. The airlines is likely to post over Rs 20 crore loss this year,”
 
Pomnath
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RE: Kingfisher Likely To Pick Up Stake In Air Sahara

Sat Oct 29, 2005 2:03 pm

Please appreciate the fact that Mr. Mallya hs a track record, wherein he will invest only if he has control of the organisation. Within the Indian context that means at least 26% and usually 30% or more.

I would not be surprised if that will be the case within the next few weeks.

I would not be surprised if the owners (and investors) of Air Sahara are more than willing to hand over control.
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