India’s Air Sahara is seeking to raise cash to help expand its fledgling international operation and boost domestic services.
The country’s second-largest privately owned airline after Jet Airways says it has hired Ernst & Young to help it in cash-raising efforts. It says it intends to sell shares directly to local and overseas investors through a private placement rather than to the public through an initial public offering (IPO), although it will not say what percentage will be sold or how much it hopes to raise.
Foreign funds have been flowing into India’s aviation market over the past year as the sector has been undergoing a major expansion. Low-cost pioneer Air Deccan and recently launched SpiceJet have both brought in foreign institutional investors, while established Jet had a successful IPO early this year that raised more than $400 million.
Air Sahara was established in the early 1990s as Sahara India Airlines and is wholly owned by the Sahara Group, which is a diversified conglomerate. It was exclusively a domestic operator until early last year, when it was given permission to launch services to Colombo in Sri Lanka. It now also serves the Nepalese capital Kathmandu as well as Singapore, and is planning to expand with services to other international destinations such as London and Kuala Lumpur.
The carrier is also planning to expand its domestic operations to help it compete more effectively with Jet and the new low-fare airlines that have started operating.
Source: Airline Business
