Billionaire media baron Kalanithi Maran is close to sealing a deal to acquire Star
Aviation for over Rs 1,000 crore, launching himself into a struggling industry by buying an airline that is yet to start operations.
Mr Maran, who runs the Sun Network with interests in television, radio and newspapers, is buying the regional carrier in his personal capacity, persons close to the development said. Other terms of the deal and how it will be funded are not known.
Top executives of Star Aviation and Sun Network maintained that no such deal has been finalised. Mr Maran, the son of late Union minister Murasoli Maran and the grand nephew of Tamil Nadu chief minister M Karunanidhi, could not be reached. The 43-year-old is ranked 601 in the Forbes’ list of billionaires, with a net worth of $1.2 billion.
Star Aviation is owned by a Dubai-based NRI, Syed Mohammad, who owns a business empire estimated to be worth $3.8 billion, including an aircraft leasing company. Star Aviation’s imminent sale comes in the backdrop of its delayed launch because of a challenging economic environment. The airline industry has been especially hard hit and trade group IATA estimates that Indian carriers will post a combined loss of $1.5 billion (Rs 7,500 crore) in 2009.
Star Aviation, which was scheduled to launch its services early this year, now plans to do so in January or February 2010, a company official said on condition of anonymity. The airline has placed orders for seven E170 aircraft from Brazil’s and two have been delivered so far, he added.
Kapil Kaul of the Centre for Asia Pacific Aviation said that if the deal materialises, it is “very good news for Star Aviation’s promoters.”
“The Maran family have access to huge resources and sustaining power; they can bring capital to fully fund the project. But most important is having a professional management as well the choice of aircraft,” he observed.
Star Aviation, the first carrier to get an approval to operate a regional airline in the southern part of the country, has asked the government for time up to June 2010 to launch its services after missing a previous deadline. “As the first airline, Star will have the first mover advantage and it could also benefit of operating from the less crowded airports in the South. The entry of regional carriers will also enhance connectivity to the underserved Tier II and Tier III cities,” said an aviation analyst on condition of anonymity.
Sun Network, which owns the Sun TV channel, Suryan FM radio stations and the Dinakaran daily, has a licence as non-scheduled airline operator for chartered flights and air taxi services under the name Global Express. Two years ago, the company won shareholder approval to operate commercial flights.
It is also learnt that a company by the name “Sun Aviation” has been incorporated with the Registrar of Companies in Chennai, with Mr Maran as the founder.
ET had reported in August that Star Aviation and Sun Network were in talks for 50:50 joint venture, but both companies denied the development. In recent weeks, Star Aviation has again been in the news, with Mr Maran and Paramount Airways seen as the likely buyers.
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Friday, November 13, 2009
Thursday, November 12, 2009
Car buyers now face longer waiting periods
Manufacturers report unexpected post-festival surge in demand.
The bad old days of waiting periods for cars seem to have returned, with manufacturers reporting an unexpected surge in post-Diwali sales, forcing customers to wait a month to as much as four months for almost all models from the Swift to the Honda City.
Maruti Suzuki’s newly-launched hatchback, Ritz, reportedly has a waiting period of over two months, while buyers will have to wait for up to four months for the upper-range Honda City models. The average waiting period for the car is six to eight weeks.
What has come as a pleasant surprise to car makers is that the queues haven't shortened even a month after the festive period.
Pawan Goenka, president (automotive sector), Mahindra & Mahindra (M&M), said, “We are running our plants to full capacity, which is unusual during this time of the year. November-December demand is much stronger than usual.”
According to Goenka, the Xylo (a multi utility vehicle), Scorpio (a sports utility vehicle) and the Bolero (an MUV) have an average waiting period of two to three weeks. M&M is India's largest manufacturer of utility vehicles.
Similarly, Korean car brand Hyundai Motors has reported a sustained demand boom for its flagship models, i10 and i20, after Diwali.
Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India, said, “Retail demand now is at least 20 to 25 per cent more than last November.”
Auto players said the sustained boom in car sales was a result of the pent-up demand in the earlier quarters, attractive interest rates on vehicle loans offered by banks, discounts and other financial benefits offered by the manufacturers and the general fear of a rise in both automobile prices and lending rates in the coming months.
Kotak Mahindra Prime, the car financing subsidiary of Kotak Mahindra Bank, raised vehicle interest rates 50 basis points a couple of weeks ago, but that hasn't impacted demand.
Sumit Bali, chief executive officer, Kotak Mahindra Prime, said, “The momentum in demand this year after the festivals has been well carried over. There is a strong growth momentum in vehicle off take. Interest rates are manageably lower and should not move upwards too much in the coming months. That’s a positive for the sector.”
The two-wheeler market isn’t far behind, with both Hero Honda and Bajaj Auto showing a waiting period after many years.
Anil Dua, senior vice president, marketing, sales and customer care, Hero Honda Motors, said the festival spirit was spilling over, as was evident from the surge in demand in November as well. “We had earlier said that we will sell four million units this year but now we are confidently saying we will cross that target handsomely.”
Dealers say the waiting period for diesel cars is “just going through the roof”. The Swift Dzire diesel model has a waiting period of over three months. The same is true for the diesel models of the Swift and Ritz.
The bad old days of waiting periods for cars seem to have returned, with manufacturers reporting an unexpected surge in post-Diwali sales, forcing customers to wait a month to as much as four months for almost all models from the Swift to the Honda City.
Maruti Suzuki’s newly-launched hatchback, Ritz, reportedly has a waiting period of over two months, while buyers will have to wait for up to four months for the upper-range Honda City models. The average waiting period for the car is six to eight weeks.
What has come as a pleasant surprise to car makers is that the queues haven't shortened even a month after the festive period.
Pawan Goenka, president (automotive sector), Mahindra & Mahindra (M&M), said, “We are running our plants to full capacity, which is unusual during this time of the year. November-December demand is much stronger than usual.”
According to Goenka, the Xylo (a multi utility vehicle), Scorpio (a sports utility vehicle) and the Bolero (an MUV) have an average waiting period of two to three weeks. M&M is India's largest manufacturer of utility vehicles.
Similarly, Korean car brand Hyundai Motors has reported a sustained demand boom for its flagship models, i10 and i20, after Diwali.
Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India, said, “Retail demand now is at least 20 to 25 per cent more than last November.”
Auto players said the sustained boom in car sales was a result of the pent-up demand in the earlier quarters, attractive interest rates on vehicle loans offered by banks, discounts and other financial benefits offered by the manufacturers and the general fear of a rise in both automobile prices and lending rates in the coming months.
Kotak Mahindra Prime, the car financing subsidiary of Kotak Mahindra Bank, raised vehicle interest rates 50 basis points a couple of weeks ago, but that hasn't impacted demand.
Sumit Bali, chief executive officer, Kotak Mahindra Prime, said, “The momentum in demand this year after the festivals has been well carried over. There is a strong growth momentum in vehicle off take. Interest rates are manageably lower and should not move upwards too much in the coming months. That’s a positive for the sector.”
The two-wheeler market isn’t far behind, with both Hero Honda and Bajaj Auto showing a waiting period after many years.
Anil Dua, senior vice president, marketing, sales and customer care, Hero Honda Motors, said the festival spirit was spilling over, as was evident from the surge in demand in November as well. “We had earlier said that we will sell four million units this year but now we are confidently saying we will cross that target handsomely.”
Dealers say the waiting period for diesel cars is “just going through the roof”. The Swift Dzire diesel model has a waiting period of over three months. The same is true for the diesel models of the Swift and Ritz.
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