Promoters not to exit SpiceJet, eye $100 mn funding

New Delhi: The SpiceJet sale story seems to be taking a new turn. After negotiating with UB Group chairman Vijay Mallya and US investment firm Wilbur Ross for a week, the Kansagra family seems to have decided not to exit the budget airline for the time being.
Talks between the promoters of the low-cost airline and Wilbur Ross are now focused on bringing in fresh investment of up to $100 million by issuing new shares — to enable the airline to tide over the financial crunch. A crucial meeting of the company board is expected on Wednesday, sources close to the deal said.
“The management of SpiceJet is unlikely to change for the time being. Preferential allotment to the US investor is on the cards. The main shareholders are not exiting the company now,” he added. SpiceJet promoter Bhulo Kansagra, however, preferred not to speak on the issue.
It’s believed that the UB Group chairman had been keen to take the driver’s seat in SpiceJet. According to market sources, Mr Mallya is still keeping his offer open, even though it has not enthused the budget airline’s promoters.
Taking over SpiceJet would give Mr Mallya a 40% market share in the domestic aviation sector and hence enough muscle to influence fares.
09/07/08 Economic Times

To Read the News in full at Source, Click the Headline

Categories: SpiceJet Jul 2008