AWIN First Jun 14 , 2010
Neelam Mathews email@example.com
Indian media baron Kalanithi Maran is acquiring 37.73% of budget carrier Spicejet, with an open offer for another 20%, which is expected to breath new life into the company.
One of Maran’s companies, Kal Airways, will acquire the shares held by Royal Holdings Services Ltd. and Wilbur Ross in the airline. “We simply feel that the management we installed has turned the company around and therefore it is ready for the next phase of ownership and expansion,” Ross said to the Financial Times.
SpiceJet has 20 Boeing 737s with one more delivery expected this year and three next year. It recently got the rights to fly to neighboring international destinations.
“A robust expansion of the carrier is expected with a request for information for around 40 aircraft in the offing for its 10- to 15-year plan,” says Kapil Kaul, Indian subcontinent head of think tank Center for Asia Pacific Aviation.
A stable financial owner, leading to a Spicejet with reduced or no debt, will lead it to the path of expansion, Kaul explains.
Spicejet is likely to focus on lower- and mid-management replacement. “It is now a question of getting the team together,” adds Kaul.
WL Ross & Co. LLC, a global private equity investor, had in mid-2008 announced that SpiceJet had accepted an offer in principle that would make available to it approximately $80 million. “We believe in the long-term validity of the low-cost airline model in India and that fuel prices eventually will stabilize,” Ross had said.