SpiceJet looks to raise Rs 400 crore through a share offering

Mumbai: Low-cost carrierSpiceJet is looking at raising funds through a share offering, its top official said. PromoterKalanithi Maran pledged a large chunk of his holding 10 days back to raise Rs 200 crore for the cash-strapped airline.
"A rights issue can be one option the company might consider," SpiceJet CEONeil Mills said, adding that merchant banker Enam has been appointed to suggest options and methods of getting capital into the airline.
Mills, who spoke to ET on the phone from Goa, did not disclose how much the airline was looking at raising but bankers said it could be Rs 400 crore through offering of shares. The carrier hopes to conclude the process by the end-December.
There have been concerns that Maran, whose Sun TV network is under the scanner for alleged financial irregularities, might look for an exit from SpiceJet as he might not be able to sustain losses, which are part of an airline's cyclical business, for long under these circumstances.
Industry insiders expect Gurgaon-headquartered SpiceJet to post a loss of Rs 50-100 crore in the first quarter of this financial year. The carrier made a profit of 101 crore in FY10-11 but posted a loss of Rs 59 crore in its last quarter, as opposed to a profit of Rs 29 crore in last quarter of the previous financial year.
25/07/11 Manisha Singhal/Economic Times

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Categories: spicejet Jul 2011