SpiceJet plans to raise $100 mn for fleet expansion by year-end

Mumbai: SpiceJet is planning to raise a total of $100 million for fleet expansion by the end of the current financial year, according to Siddhant Sharma, CEO of the Delhi-based budget carrier.
Sharma's comments come just a day after the UK-based promoter-director of SpiceJet said he was willing to divest his 12.91 per cent stake in the airline if he got the right valuation.
The airline, however, is yet to decide on the mode of funding. "We have the option of taking the sale and lease back route (only lease margins will have to paid by the airline which are minimal) or we could raise money in the debt-equity ratio of 80:20. We could look for simple equity infusion as well," said Sharma.
The airline will appoint a merchant banker to structure the deal soon. Sharma, however, was noncommittal on on whether the funds would come through private equity investors or as a loan or through dilution of equity by current stake holders.
The airline has been looking for funding for quite some time but the deals have not materialised. PE players, such as Texas Pacific Group, had submitted a term sheet but did not carry the proposal through.
In the current scenario, almost all airlines are looking for funding to the tune of $75 million to $100 million but there has not been enough investor interest, according to investment bankers.
14/05/08 Manisha Singhal/Business Standard

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Categories: SpiceJet May 2008