Goldman joins Ross in $100 mn SpiceJet funding
12 Aug 2008
Mumbai/New York: Leading global investment banking, securities and investment management firm, Goldman Sachs will invest $20 million (Rs84 crore) in struggling low cost carrier, SpiceJet through equity warrants. For SpiceJet, this investment will be in addition to an $80 million capital infusion from WL Ross and Co, a private equity fund from New York.
WL Ross has agreed to invest $80 million in two tranches, while Goldman Sachs will release 10% of $20 million immediately, and the balance over 18 months.
SpiceJet officials have said that the infusion of $100 million should take care of the airline's capital requirements for the next two years. They have also clarified that the deal will not trigger an open offer as both investors are not converting their bonds or warrants for the time being.
Officials also said that efforts to replace the chief executive are also on. This has been necessitated by the resignation of Siddhanta Sharma, the earlier chief executive.
With these deals, officials said SpiceJet will become a well funded company and help it emerge as a strong player in the local market where it already holds a 10% market share.
