Monday, September 24, 2012

Air Kerala To Raise Funds As Initial Capital

Air Kerala is planning to raise R200 Cr as initial capital which would start operations with five leased aircraft flying to the Middle East.

Of this initial investment, 26% of share will come from the government, public sector institutions and the Cochin International Airport Ltd (Cial), while the rest will be held by shareholders.

The shareholder are expected to invest minimum of R10,000. The face value of the shares will however remain Rs 10, but each investor is expected to purchase at least 1,000 shares.

Air Kerala will be set up as a subsidiary of the country's first private-public funded Cochin International Airport Limited, according to NDTV.
AirKerala would primarily cater to Keralites living in the Gulf region. It has sought exemptions from rules that require at least five-year experience in domestic services and a minimum of 20 aircrafts to start services.

These norms had been relaxed for Air India Express holding, a subsidiary of Air India and the same relaxation will be given to Air Kerala.

The Air Kerala initiative which was initially proposed as a subsidiary of CIAL five years ago had to be shelved due to policy restrictions for new airlines to fly international routes. The initiative was recently revived by Yusuf Ali, the NRI businessman, who recently resigned from Air India Director Board.

Recently, Rakesh Jhunjhunwala through its investment arm - Rare Enterprises invested around R7.69 Cr in SpiceJet, while LKP Finance invested in Kingfisher Airlines by buying OCDs which were to be converted into equity stake of up to 8% in the same month this year.

The Cabinet Committee on Economic Affairs, on Friday, approved 49% foreign direct investment (FDI) in the aviation sector, allowing foreign carriers to pick up stake in domestic airlines.
Foreign carriers such as British Airways and Virgin Atlantic Airways have expressed interest in investing in Indian carriers.

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