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SpiceJet eyeing fresh investment of USD 100 million

In a recent development, the Kansagras, promoters of SpiceJet have decided not to go ahead with selling stake of SpiceJet after negotiating with Vijay Mallya, Chairman, UB Group and New York-based investment firm W L Ross & Co for a week. Sources close to the deal said that the promoters of the Low Cost Carrier (LCC) are in talks with Wilbur Ross for fresh investment of up to USD 100 million to aid the LCC to sail through its financial crunch. The fresh investments and issue of new shares with the same are being discussed in a crucial meeting today. Wilbur Ross is likely to get preferential allotment, said the source. At the current share price, the airline is valued at over Rs 600 crore.

Last week Mallya had almost clinched the deal when things changed suddenly. Difference in valuation or some other players’ intervention was cited as reason for the failure. According to market sources, Mallya is still keeping his offer open. If Mallya takes over SpiceJet, which enjoys a market share of a little over ten per cent, it will give him 40 per cent market share in domestic aviation and enough power to dictate fares. Currently, Kingfisher-Deccan and Jet-JetLite combines are neck-to-neck with 29 per cent market share each.

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