SpiceJet suitors queue up meetings this week

The race for buying a strategic stake in Delhi-based budget carrier SpiceJet is hotting up with three full-service carriers Jet Airways, Kingfisher Airlines and Paramount Airways lining up crucial meetings with investment bankers and target company executives this week. Paramount Airways had meetings with investment bankers and company executives on Saturday in south India. The airline also has the backing of a leading merchant banker, which is expected to partly fund its bid. Sources close to the development said Jet Airways had a preliminary round of discussion with SpiceJet last week in London. Kingfisher Airlines has also evinced interest and has lined up meetings for this week.

Though executives of the airlines continued to deny any consolidation move, sources confirmed that various meetings were lined up by Jet Airways and Paramount Airways this week. “The rounds of negotiations are progressing. The key criterion in the race will be the price offered by airlines. Financial investors are keen on exiting the airline business but at a reasonable price,” they added. About 25 per cent of the shareholding in SpiceJet is locked-in investments that still cannot be sold. The airlines are eyeing shareholding scattered among a group of stake holders. A solution is supposed to emerge from the meetings scheduled for this week. According to SpiceJet’s website, locked-in shares of investors include those of Ewart Investments (5.82 per cent), BNP Paribas (5.43 per cent), KBC Financial Products UK (0.87 per cent), Istithmar (PJSC) (13.42 per cent) and Tata Investment Corporation (0.42 per cent).

The big investors who are not locked in include the promoters, the Kansagra family, who hold 12.91 per cent, SpiceJet Director Ajay Singh, who holds 4.16 per cent, and some others. The public holds around 24.27 per cent. SpiceJet, according to sources, has constituted an investors’ committee to monitor and supervise operations and accounts. This committee includes representatives of investors and directors. SpiceJet has a fleet of 11 aircraft and operates 64 flights a day. It plans to add five extended range jets to its fleet soon.

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