Vijay Mallya acquires 50% of US-based Epic Aircraft for $120 million

Our Corporate Bureau
27 September 2007

Vijay Mallya, billionaire chairman of the United Breweries Group and of Kingfisher Airlines, a part of that group, has acquired half the equity of Epic Aircraft, an Oregon, USA, based small aircraft company which has ambitions of growing big. The price is $120 million (about Rs 480 crore), which Mallya is reported to be paying in his personal capacity.

domain-b.com had reported on 9 August this year that "Mallya flew into Oshkosh, Wisconsin, for the Experimental Aircraft Association''s AirVenture air show on his personal Airbus A320 and made an appearance with Epic Aircraft president and CEO Rick Schrameck during a press conference." (See: Vijay Mallya and Epic Aircraft: Buying a stake or a plane?) At that time, while we stated that "Mallya sealed a deal with Schrameck, investing a significant amount of money into EA", the details of the deal were not made public. Now they are public.

Rick Schrameck, Epic Aircraft''s president and CEO, said, while announcing the new partnership today, "Epic was really looking for a strategic partner, not just an investor. Dr. Mallya now has a significant interest in our company, and we will immediately benefit from his relationships with a variety of companies, including Airbus and Pratt & Whitney."

Epic Aircraft, which launched itself in the market with the novel concept of selling "homebuilt" aircraft, where customers participate in the production process, is now going in process of getting its aircraft certified. It has set up facilities in Canada, where it will find it easier to get the certification done. The US Federal Aviation Administration takes longer to complete the certification process.

Under FAA rules for experimental aircraft, its owner must build at least 51 per cent of each plane he owns. To meet this condition, Epic invites customers to its manufacturing facility, where they build their planes with the help of Epic Aircraft mechanics. As "experimental aircraft" the planes are allowed to be flown in the US without FAA certification.

The Canadian government is keen to attract investment, and has offered Epic Aircraft substantial incentives to locate in Canada, which it is doing at a 100,000-square-foot facility near Calgary in Alberta province. The company is also negotiating with the recently created Canadian Centre for Aircraft Certification to develop a 50,000-sq. ft. certification facility. Epic will be the first aircraft company to use the CCAC facility.