SpiceJet to take call on funding in a fortnight

New Delhi/Mumbai: Cash-strapped discount airline SpiceJet Ltd will make a final choice over the next fortnight on how to raise funds, the company’s top executive said. Options before SpiceJet include merging with a peer, he said, as billionaire US investor Wilbur Ross joined its list of suitors.
SpiceJet, India’s third largest low-fare airline by passengers flown, is seeking to raise at least $100 million (Rs431 crore) to boost working capital. It has appointed merchant banker NM Rothschild and Sons (India) Pvt. Ltd to suggest fund-raising options. The airline’s loss widened to more than Rs133 crore in fiscal 2008 from Rs78 crore in the previous year.
“The merchant banker has gone and knocked on the do-ors of various people,” SpiceJet chairman Siddhanta Sharma said in an interview. “This includes stand-alone shareholders, hedge funds, VCs (venture capital firms) and so on and so forth. And I am sure they have spoken about possibilities of merger,” he said.
Sharma maintained that nothing had “crystallized” yet. “What (Rothschild) now has to do is present the whole thing to the board in general and to key shareholders in particular,” he added. The airline, based in Gurgaon, is controlled by investors, including the UK-resident Kansagra family, which holds a 12.91% stake. Dubai-based investment agency Istithmar World PJSC holds 13.42%; the Tata group, 6%; and the airline’s director Ajay Singh, 4.16%, in the domestic carrier.
08/07/08 Tarun Shukla, P.R. Sanjai and Vipin Nair/Livemint

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

Categories: SpiceJet Jul 2008