Chennai-based Paramount Airways is looking to acquire GoAir, the budget carrier promoted by the Wadia Group, in a cash and stock deal, a business news channel reported on Sunday quoting sources close to the development.
It said Paramount will pay Rs 100-150 crore (Rs 1-1.5 billion) to the Wadias in cash. The Wadias may also get a stake of 7 to 8 per cent in the Paramount Group. An announcement will be made shortly, it added.
Go Air, however, refuted reports that the airline was in discussions with Paramount Airways for a possible merger.
"In the light of recent speculative press reports, GoAir refutes any contact with Paramount Airlines and refuses to comment on market speculation," said a statement released by the airline. The Paramount Airways brass was not available for comment.
The report said that GoAir has a debt of Rs 400 crore (Rs 4 billion) on its books. The airline has a market share of 5.7 per cent. Paramount Airways, the country's first all-business class airline, operates predominantly in the South and has a market share of 2 per cent.
In the past too, there have been reports that the Wadias were looking for a buyer for their airline. The names that had done the rounds at that time were Paramount Airways and budget carrier SpiceJet.
GoAir operates domestic passenger services to 11 cities with 385 weekly flights and has a fleet of eight aircraft. Paramount Airways is the first airline in India to launch the Embraer 170/190 family of aircraft in the country.
These are smaller aircraft with 70 to 122 seats. The airline flies to 16 destinations across India and operates 72 flights daily, carrying over 3,600 passengers. The airline is promoted by M Thiagarajan.
