Vijay Mallya on the prowl again, targets SpiceJet

Liquor baron Vijay Mallya’s appetite for assets in the aviation space is insatiated, with enough indications that he’s on the acquisition trail again. After recently acquiring a majority (26%) stake in the country’s largest low cost carrier Air Deccan for Rs 550 crore, Mallya has set his eyes on another LCC, SpiceJet. Indication of Mallya’s interest comes amidst speculation that rival carrier Jet Airways has also shown interest in acquiring SpiceJet. However senior SpiceJet officials said that there was no plan to sell stake again after they offloaded 25% stake worth Rs 72 million in January this year. “We have sufficient funds with us, and there is no immediate plan to sell stake again,” officials added. The possible acquisition of SpiceJet by Mallya was fuelled when he told a news channel that though talks in this direction had not been initiated, “SpiceJet would come to him if they wanted maximum shareholder value”.

Earlier, the low cost carrier on January 11 had approved 25% fresh issue of shares worth $ 72 million. While the Tatas were allotted shares worth $17.5 million, Ishtitmar bought shares worth $25 million, Goldman Sach $15 million, BNP Paribas $5 million, KBC Fund UK $2.5 million, and Telemnix $7 million. With the dilution of stakes, the stake held by the promoters, the Kansagara family had come down from 17% to 13%. SpiceJet had raised the money for the acquisition of a new aircraft. The company has placed firm orders for 10 more Boeing 737-800s at a cost of $700 million at list prices. By December, the company will have a fleet of 18 aircraft. The two-year-old airline already enjoys a market share of 8%. In the last quarter, the company made losses to the tune of Rs 21 crore, and has accumulated losses of around Rs 70 crore.

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