Paramount Airways owned by Madurai based textile baron Thiagrajan has not one but two airlines on its radar. It plans to acquire Delhi-based Spicejet and Mumbai-based GoAir to create the first 3-way merger in Indian aviation history.
Paramount may acquire 51% stake in Spicejet for nearly Rs.650 crore and GoAir’s assets for Rs.150 crore. The main rationale behind doing this is to rationalize routes and defer induction of additional aircraft and improve yields through consolidation.
Paramount will run Spicejet independently as a low cost carrier. For Spicejet, Paramount may buy shares from financial institutions that hold 62% in the company through block deals on the stock exchanges.
Another option for it is to take the stake held by the promoters, director Ajay Singh and other individual investors by giving a 20-30% premium to the current stock price. It would then make a mandatory 20% open offer to investors.
Paramount will want to merge GoAir with itself and discontinue the brand. It would instead want to use its parking bays, prime-time slots, engineering and airport infrastructure, and trained manpower.
But both GoAir and Spicejet have vehemently denied these developments, but only the coming days would portray the exact picture.
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