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ZEEL to buy aviation firm Fly By Wire for Rs 61 crore
MUMBAI: An entertainment broadcasting company acquiring an aviation firm? That is exactly what Zee Entertainment Enterprises Ltd (ZEEL) is doing.
ZEEL said it will fully acquire Bangalore-based aviation company Fly By Wire (FBW) International Pvt Ltd for a total consideration of Rs 61.25 crore (Rs 612.5 million).
ZEEL board has given in-principle approval for the 100% acquisition of FBW.
Explaining the rationale, ZEEL said: “Subsequent to sale of the smaller aircraft owned by the company, the company has been chartering the aircraft from FBW on an exclusive basis. In order to save costs and for ensuring better operational efficiency, it is considered expedient to own the aircraft by acquiring 100 per cent equity stake in FBW.”
FBW provides aircraft charter services under a NSOP licence obtained from the Director General of Civil Aviation (DGCA) and currently owns/operates one Bombardier Challenger 605 aircraft. The company reported turnover of Rs 1.33 crore (Rs 13.3 million) in FY15 compared to Rs 1.41 million a year ago.
On cost of acquisition, ZEEL said: “In addition to the consideration of Rs 2.75 crore (Rs 27.5 million) payable for entire stake in FBW, target entity also has an outstanding bank loan of Rs 58.50 crore (Rs 585 million) availed earlier by FBW for financing the said aircraft.”
ZEEL will initially acquire 49% stake in FBW. The remaining 51% stake will be acquired within five days of receipt of approval from Ministry of Civil Aviation. The process is expected to be completed by mid-July, the company said.
Shares of ZEEL shed 3.69% on Tuesday to close at Rs 386.80 on the BSE.