SpiceJet CEO, Sidhant Sharma, calls it a day
12 Jul 2008
Mumbai: Chief executive officer of low cost airline SpiceJet, Siddhant Sharma, may have called it a day at the struggling airline.
Sharma has piloted the low cost carrier since its startup days in 2005, positioning it as a budget airline subsequent to a group of shareholders buying out SK Modi from the erstwhile ''Modiluft'' and renaming it SpiceJet.
Sharma has now put in his papers at a time when the cash-strapped airline is looking at options of either a merger with liquor baron Vijay Mallya promoted Kingfisher Airlines, or a deal with US-based rescue fund Wilbur Ross.
So far, Sharma has not confirmed the development.
The airline board is scheduled to meet to finalise funding options and the future course of action for the airline sometime next week. The board meet comes ahead of the carrier readying to take deliveries of five Boeing 737s over the coming five months.
According to reports, negotiations with Kingfisher are deadlocked as shareholders want Rs100 crore in cash, in exchange for agreeing to a share swap deal in the ratio of 1:3. Reports also suggest that Kingfisher may have agreed to the cash component earlier but backed off subsequently. Moreover, an investment by Kingfisher would also have to have the approval of the major shareholders in SpiceJet, including Istithmar, the private equity arm of the Dubai government.
Bankers Rothschild, whom Spicejet appointed two months ago to lead their quest for investors, is reported to be ready to make a presentation to SpiceJet's board soon about the pros and cons of taking aboard either of the two interested parties as an investor. Wilbur Ross is ready to put in around $100 million, and is trying to find a way around the foreign direct investment norms that limit the maximum foreign shareholding in an airline to 49 per cent.
For Ross, it will not be his first investment in the country as he had acquired worsted suiting maker, OCM India Ltd, in October 2006, for $37 million.
