Tatas may double stake in SpiceJet
Tata Group is to double its stake in SpiceJet to around 14% and involve itself in the management.
By TNN |
NEW DELHI: The Tata group is likely to double its stake in SpiceJet to around 14% and involve itself in the management of the Delhi-based airline. The Tatas are expected to invest more in SpiceJet when the airline goes for another round of fund-raising in the near future.
Both SpiceJet and the Tata group have denied such a move. When contacted, a Tata spokesperson said: ���Tata Investment Corporation and Ewart Investments had picked up stake in SpiceJet. No investment has been made in SpiceJet by them after that.��� ���The company has not received any information that the Tatas are interested to pick up stake beyond the preferential allotment,��� SpiceJet CEO Siddanth Sharma said.
According to sources, the SpiceJet management is rather keen to utilise the Tata group���s management expertise in running the airline���s day-to-day operations. The airline���s management has invited the Tatas to take a seat on its board, they said.
Till date, both the companies have held that the Tata Group is involved with the low-cost carrier as a financial investor. In the last round of fund raising of around Rs 300 crore, SpiceJet diluted 25% stake to a clutch of investors, including the Tata group, Istithmar (the Dubai government���s private equity arm), BNP Paribas and Goldman Sachs. The Tata Group, through two of its investment arms, picked up around 7% stake for Rs 75 crore while Istithmar raised its equity from 3% to 11% by pumping in $25 million. BNP Paribas invested $15 million for 4% equity while Goldman Sachs picked up 1.5% for around $5 million.
The US-based private equity fund Texas Pacific Group (TPG), which had initially expressed its interest to invest $30 million in the low-cost carrier, has pulled out. It remains to be seen if TPG would also enter the fray when SpiceJet goes out to raise another $50 million in its next round of equity dilution. SpiceJet management had held that TPG would re-visit the issue of investing in the company at a latter date.
The additional funds will be used by SpiceJet to part finance purchase of 10 Boeing 373-900 aircraft to be delivered in 2009. SpiceJet plans to add another eight aircraft by 2007-end, with 10 more joining the fleet in 2008. The airline operates a fleet of 10 Boeings.
Both SpiceJet and the Tata group have denied such a move. When contacted, a Tata spokesperson said: ���Tata Investment Corporation and Ewart Investments had picked up stake in SpiceJet. No investment has been made in SpiceJet by them after that.��� ���The company has not received any information that the Tatas are interested to pick up stake beyond the preferential allotment,��� SpiceJet CEO Siddanth Sharma said.
According to sources, the SpiceJet management is rather keen to utilise the Tata group���s management expertise in running the airline���s day-to-day operations. The airline���s management has invited the Tatas to take a seat on its board, they said.
Till date, both the companies have held that the Tata Group is involved with the low-cost carrier as a financial investor. In the last round of fund raising of around Rs 300 crore, SpiceJet diluted 25% stake to a clutch of investors, including the Tata group, Istithmar (the Dubai government���s private equity arm), BNP Paribas and Goldman Sachs. The Tata Group, through two of its investment arms, picked up around 7% stake for Rs 75 crore while Istithmar raised its equity from 3% to 11% by pumping in $25 million. BNP Paribas invested $15 million for 4% equity while Goldman Sachs picked up 1.5% for around $5 million.
The US-based private equity fund Texas Pacific Group (TPG), which had initially expressed its interest to invest $30 million in the low-cost carrier, has pulled out. It remains to be seen if TPG would also enter the fray when SpiceJet goes out to raise another $50 million in its next round of equity dilution. SpiceJet management had held that TPG would re-visit the issue of investing in the company at a latter date.
The additional funds will be used by SpiceJet to part finance purchase of 10 Boeing 373-900 aircraft to be delivered in 2009. SpiceJet plans to add another eight aircraft by 2007-end, with 10 more joining the fleet in 2008. The airline operates a fleet of 10 Boeings.
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