Private Equity-backed Air Deccan Files IPO Prospectus; PE Funds To Exit Partially
[Via The Economc Times] India’s leading budget airline Air Deccan has filed its Red Herring prospectus with Indian market regulator Securities Exchange Board of India for the much-awaited initial public offering. The airline proposes to offload 25 million shares which translates to 25 per cent of its stock. The roughly $250-million issue is likely to hit the market in March.
Air Deccan promoters led by Captain GR Gopinath, hold 64 per cent of the stock while the balance is with private equity (PE) funds, which include ICICI Venture Funds Management Co that has invested $40-50 million. The airline is also offering 10 per cent of its stock as ESOPs, which is being vested with employees in four annual tranches. Merchant bankers say, post-IPO, the promoter stake will go down to 48 per cent while the PE exposure will be 27 per cent. But, when the first round of ESOP vesting happens in June 2006, about 0.6 per cent stock will go to employees.
This will realign the PE stake to 26.9 per cent and promoters to 47.7 per cent. The PE investment pact is designed to facilitate plough-back of up to 8.9 per cent of PE stock to the promoters in a two-year time frame on achieving certain predetermined milestones.
