VRL Logistics' promoters today said the proposed regional airline venture would be a "personal investment" of Rs 1,400 crore and would not impact the firm's balance sheet, as the scrip plunged 18 per cent on the stock bourses .
In a release, company Chairman Vijay Sankeshwar also emphasised he would primarily play the role of a financial sponsor for the planned airline business.
His clarification came against the backdrop of the shares of VRL Logistics tumbling 18 per cent to close at Rs 315.10 apiece on the BSE.
"I wish to clarify that the proposed entry into airline business is a personal investment and at no point do we anticipate VRL's balance sheet being used for the venture," Sankeshwar said in a release submitted by the company to the stock exchanges.
The proposed airline business when set up would be run by professionals with strong sector experience, and "I will primarily play the role of a financial sponsor", he noted.
"Our preliminary estimates suggest the total investment envisaged in the airline business is Rs 1,400 crore over next 3-4 years of which my equity will be Rs 400 crore and further Rs 1,000 crore will be debt to fund the regional airline business," Sankeshwar said.
According to him, the opportunities in the airlines business was phenomenal and he was personally excited to be a part of the fastest growing aviation market in the world.
"My principles of cost focus and high utilisation has made us a leader in domestic transport, which I think are key attributes to succeed in the aviation sector as well," he said adding that the proposed venture was still at a very premature stage.
"We remain the largest shareholders of VRL with a 69 per cent stake in company today and do not anticipate our stake to significantly decrease in the company. VRL Logistics will continue to be the primary focus and interest of promoters and I will continue to be in full charge of the day to day operations," Sankeshwar said.
The promoters yesterday had said that they intend to enter the civil aviation industry by incorporating a separate company to undertake the business of a regional airline.
VRL Logistics is into passenger and goods transportation business. It is also a parcel delivery service provider and has interests in wind power generation and air charter operations.
Its goods transportation fleet includes 3,872 owned vehicles as of March 2016 while passenger transportation fleet includes 381 owned vehicles.