Air Deccan, India's first low cost airlines, is going to conclude its first phase of equity divestment within 8-10 days, its managing director, Captain G R Gopinath, said in Kolkata on Friday.
The company has received seven bids, six international and one domestic, and it is considering four of them.
It plans to raise anything between $40-60 million by selling upto 26 per cent equity, Gopinath added.
"Air Deccan is in the final stages of negotiation with private investors and an announcement will be made in 10 days time," Gopinath said at a press meet before the airline's first flight out of Kolkata.
The stake sale is, however, likely to exclude Richard Branson of Virgin Atlantic as there is little clarity on government's directive on FDI in airlines.
"We had discontinued talks with him," Gopinath said. He said an IPO would follow within five years and private equity partners would get an exit option.
The stake sale will provide the company cash for adding more aircrafts through outright purchase or lease.
It is buying two new Airbus craft, which will be added in February 2005. It has taken delivery of two ATRs couple of days back and three more are being added this month.
Deccan is planning to connect number of smaller cities once these ATRs are put in operation.
Gopinath said Delhi would be connected to cities like Amritsar, Dehradun, Agra, Kanpur and Jalandhar.
From Kolkata, Deccan plans to connect cities like Bhubaneswar, Coochbehar, Jamshedpur and Bagdogra.
"At present the airline is doing about 75 flights a day. It intends to add 100 flights a day every year going forward," he said. Deccan is expecting revenues of $ 90 million in 2004-5 and hoping to report a net profit.
Operational efficiency would go with more flights and ticket prices would fall further, said Gopinath.
Crisil MarketWire adds from New Delhi: Earlier today, Gopinath said Air Deccan has "discontinued" talks with Richard Branson's Virgin Atlantic, which was keen on picking up to 49 per cent stake in the company.
"Since there is no clarity on the subject (if Branson can invest in India's domestic airlines as an individual or as an airline operator) or whether his (Branson's) investment will be direct or indirect, we do not want to pursue the talks," Gopinath said.