Mallya-SpiceJet may not take off

New Delhi: Differences have cropped up between UB group chairman Vijay Mallya and promoters of low-cost carrier SpiceJet over the airline’s valuation. While discussions between the two sides are still on, SpiceJet has shifted focus to billionaire US investor Wilbur Ross as it feels the price offered by Kingfisher was too low.
In case the deal with Kingfisher falls through, SpiceJet may finalise a deal with Wilbur Ross this week, sources familiar with the negotiations said.
“Kingfisher valued the low-cost carrier on the basis of the average share price of the airline in the past three months and a control premium. This has not been accepted by the SpiceJet promoters. Mr Mallya is believed to have said that the proposed value of the low-cost airline was well in line with the current market scenario,” a person close to the development said. SpiceJet officials could not be contacted. An email query to them did not elicit any response. SpiceJet stock closed at Rs 30.45 on Monday, up 21.80% over the previous day.
08/07/08 Nirbhay Kumar/Economic Times

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Categories: SpiceJet Jul 2008