SpiceJet looks to buy at least 20 more planes

Mumbai: India’s second largest low-fare carrier, SpiceJet Ltd, is likely to place an order for buying at least 20 more planes as part of a renewed expansion drive after media baron Kalanithi Maran agreed at the weekend to purchase a 37.75% stake in the airline to become its single largest shareholder.
The planned aircraft purchase would double the fleet of the Gurgaon-based airline. Maran’s entry into the airline, which follows six months of talks, is also expected to stabilize SpiceJet’s operations, improve its focus and enable it to better compete with bigger rival IndiGo, run by InterGlobe Aviation Pvt. Ltd, which is also in expansion mode.
SpiceJet executives, who spoke on condition of anonymity pending a joint statement expected after a board meeting on Monday, said the company would, for now, drop its plan to raise $75 million (Rs351 crore) through a sale of new shares.
Maran, who heads Sun TV Network Ltd, is acquiring the stake in his personal capacity from its promoter Bhupendra (Bhulo) Kansagra and US-based distressed assets buy-out specialist Wilbur L. Ross, the SpiceJet executives said. The structure of the transaction and deal value haven’t been disclosed.
An open offer to shareholders for an additional 20% of the airline will follow the deal. The open offer is expected on Monday. Under Indian takeover rules, any acquisition of a stake of 15% or more triggers an open offer for at least another 20% of the target firm.
14/06/10 P.R. Sanjai & Baiju Kalesh/Live Mint

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Categories: SpiceJet Jun 2010