Zee to acquire Bangalore-based aviation company Fly By Wire

Zee Entertainment Enterprises has informed the Bombay Stock Exchange that it is acquiring Bangalore-based aviation company Fly By Wire International. At a meeting held on March 14, 2015, the Board of Directors of Zee had inter-alia approved in-principle the acquisition of 100 per cent equity stake in Fly By Wire International.

Fly By Wire provides services relating to managing and operating aircraft, aircraft chartering and so on.

Initially, Zee proposes to acquire 49 per cent equity stake in Fly By Wire and the balance 51 per cent equity stake shall be acquired within five days of receipt of approval from the Ministry of Civil Aviation. The process is expected to be completed by mid-July 2016.

The acquisition shall be an all cash deal. In addition to the consideration of Rs 2.75 crore payable for the entire stake in Fly By Wire, the aviation firm also has an outstanding bank loan of Rs 58.50 crore availed earlier for financing its aircraft.

On the reason for acquiring an aviation company Zee informed the BSE that during FY2015-16, subsequent to the sale of the smaller aircraft owned by the company, Zee has been chartering the aircraft from Fly By Wire on an exclusive basis. However, due to frequent use of the aircraft owned by Fly By Wire, besides dependency on the aircraft, the cost of hiring has also increased. Hence, in order to save costs and for ensuring better operational and administrative efficiency, Zee has considered expedient to own the aircraft by acquiring 100 per cent equity stake in Fly By Wire.