Maran on board, SpiceJet aims big

Mumbai: With Sun Network chief Kalanithi Maran picking up a 37.75% stake in Delhi-based low-fare carrier SpiceJet at Rs 352.50 crore, the airline’s board will now have a unified direction, which willallow the airline take quicker decision in network planning and strategising in a highly competitive environment. The airline had a fragmented shareholding before the stake sale, but Maran's entry will make him the single largest shareholder with a 37.75% stake.
Says Sanjay Aggarwal, CEO, SpiceJet, “I believe that the move (Maran's entry) is definitely positive. Our investor friends are very optimistic about the development and have expressed the same to us. In fact, the overall sentiment towards the development has been positive, which is very encouraging.”
Following the stake sale, other investors like Ajay Singh will hold a 2.5% stake, Avanthi Shah 1.9%, Ewart Investments Ltd 3.3%, IDFC Premier Equity fund 2.0%, Sundaram BNP Paribas Mutual Fund 1.7%, Vijendra Singh 1.3%, Goldman Sachs 3.8%, and Isthitmar World PJSC 5.5% in the airline.
“With a strong investor on its board, the company's credit rating could also improve and enable it to raise money fairly quickly to fund its future expansion plans. Moreover, Maran's presence will help the company explore opportunities in south India where hitherto it has had a limited presence, “ said a recent analysis by Angel Broking.
The report further says that SpiceJet's impending plans to commence international operations, particularly at a time when passenger traffic is increasing for low-cost carriers, could also become a reality with a stable management and investor at the helm of affairs.
17/06/10 Financial Express

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Categories: New Jun 2010, SpiceJet Jun 2010