SPICEJET GETS INVESTMENT FROM US BILLIONAIRE WILLBUR L ROSS

by Bharat Ratna 

• An American billionaire Mr Wilbur L Ross, will invest $80 million (about Rs 345 crore) in the low cost airline SpiceJet and may pick up 13-14 per cent stake in SpiceJet

• SpiceJet, the second largest domestic budget airline with 10% share, operates 94 flights daily with a 15 aircraft fleet. The high aviation turbine fuel price forced the budget carrier to cut down its flights to 94 from 117 earlier

• Mr Ranjeet Nabha, Managing Director & CEO of WL Ross India said,
  “SpiceJet is one of the most efficient airlines in India. We are delighted to contribute to its growth and development.”

• Mr Bhulo Kansagra, member of SpiceJet board said that with this investment, we have no doubt that SpiceJet will fulfill its promise of emerging as India's leading airline and there is no change in business strategy

An American billionaire investor, Mr Wilbur L Ross, who is known for restructuring and turning around sick companies, will invest about Rs 345 crore in the low cost airline SpiceJet. 

The move comes at a time when India’s air carriers are expected to post a combined loss of $2 billion due to rising jet fuel prices and SpiceJet, among others, is struggling to fill airplane seats.

SpiceJet said on Tuesday that the private equity firm led by billionaire Wilbur Ross will invest 80 million dollar (about Rs 345 crore) in the low cost airline.

A joint statement issued by SpiceJet and WL Ross & Co said that the board of directors of SpiceJet has accepted an offer in-principle from the US-based PE firm that would make available about Rs 345 crore (around USD 80 million) to SpiceJet.

Mr Bhulo Kansagra, member of SpiceJet board said, “With this investment, we have no doubt that SpiceJet will fulfill its promise of emerging as India's leading airline."

We are delighted to have WL Ross as an investor in SpiceJet. WL Ross is one of the largest and the most experienced investor in the world.

Mr Wilbur L Ross, Chairman & CEO, WL Ross & Co LLC said , "We believe in the long term validity of the low cost airline model in India and that fuel prices eventually will stabilise," 

Mr Ranjeet Nabha WL Ross India Managing Director & CEO said that SpiceJet is one of the most efficient airlines in India. We are delighted to contribute to its growth and development.

The low-cost carrier, reeling under pressure of high jet fuel prices, recently announced to raise 100 million dollars to partly fund its fleet expansion plans.

SpiceJet, the second largest domestic budget airline with 10% share, operates 94 flights daily with a 15 aircraft fleet. The high aviation turbine fuel price forced the budget carrier to cut down its flights to 94 from 117 earlier.

This is the second investment of WL Ross in India. In February 2007, Ross acquired OCM India Ltd, a worsted suiting maker, for around USD 37 million. NM Rothschild & Sons India Pvt Ltd acted as the exclusive financial adviser to SpiceJet Ltd.

SpiceJet had raised $80 million FCCBs for pre-delivery (advance) payments of $77.5 million to Boeing Co. of the US for purchasing B737 planes. These advance payments will be released from Boeing to bond account of the company. It is meant to redeem bondholders in December 2010. With WL Ross buying out FCCBs from the existing bondholders, the company will be in a position to release a part of that. This will help in fresh fund infusion.

Mr. Kansagra further added, “SpiceJet will continue to follow its business plan and there will be ‘no change of strategy’ in SpiceJet’s business model.”