SpiceJet eyes $100 million funding - promoters may stay put
09 Jul 2008
New Delhi: Embattled domestic carrier, SpiceJet, trying to weather a downturn in industry and company fortunes, may opt for raising new funds to the tune of $100 million. It has been in the news lately thanks to persistent market rumours that promoters of the Delhi-based airline may be considering a stake divestment to either UB Group-owned Kingfisher Airlines or foreign investor Wilbur Ross. Reports have mentioned the UK-based Kansagra family and MidEast investment firm Istithimar as the likely sellers.
Talks between the promoters of the budget airline and Wilbur Ross would now appear to be focused on raising fresh investment of up to $100 million through the issuance of new shares. Company management expects the new raising will help the company tide over the financial crunch that it faces.
A crucial meeting of the company board may take place on Wednesday, according to industry sources and a preferential allotment may be made to Ross. Reports also suggest that main shareholders may not be interested in exiting the company anymore.
The Kansgara family, which holds a little under 13 per cent of the airline, has refused to comment on developments.
According to market sources, the UB Group's offer may have struck the promoters as being undervalued.
Budget carrier SpiceJet, with a fleet of 15 Boeing aircraft, operates 94 flights a day and holds a little over 10% market share.
