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AVIATION -AIR INDIA IPO |
Air-India proposes JP Morgan as lead manager for IPO, to resume services
to Mauritius
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BY OUR AVIATION CORRESPONDENT
15th August 2005: India’s international flag carrier Air-India (A-I) has proposed
investment-banking firm JP Morgan as advisor, rejecting six other short-listed
firms, for it proposed Initial Public Offering (IPO). The company is also planning to
resume services to Mauritius from October 31, which were suspended in 1985.
The carrier had earlier short-listed six investment firms, including SBI Caps, DSP
Merrill Lynch and HSBC Securities, as lead managers for the offering. About 15
firms had submitted expressions of interests (EoIs) in June 2005.
Going by the debt-equity norms, it would be ideal for Air-India to raise Rs 10,000
crore by way of equity, maintaining a debt-equity ratio of 2:1.
Now the Indian government, 100 per cent owners of the company, has to review
the short-listed firm, before placing it before the Public Investment Board (PIB) for
approval.
A-I has a share capital of Rs 153.84 crore, which is fully subscribed by the
government, and an authorised capital of Rs 500 crore. The carrier has a turnover
exceeding $1.5 billion (about Rs 6,500 crore) and an asset base of over Rs 7,000
crore.
The IPO would strengthen the equity base and net worth of the carrier and provide
comfort levels to international financial institutions and export credit institutions
to finance the aircraft acquisition plan.
The airline had also announced a massive fleet acquisition programme for the
purchase of 50 Boeing jets at around Rs 30,000 crore beginning this fiscal till
2012-13.
Meanwhile, Air India is to resume flights to Mauritius from October 31, after the
Mauritian government agreed to grant it the `fifth freedom` rights.
The company will operate three scheduled flights per week from Mumbai, and also
connect South Africa from the country, Air India`s representative in Mauritius
Renu Theophilus said.
Air India had suspended its flights to Mauritius in 1985.
BY OUR AVIATION CORRESPONDENT
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