The Hindu Business Line : Temasek arm, UAE co to invest $20 m in SpiceJet

THE Singapore-based MacRitchie Investments (a wholly-owned subsidiary of Temasek Holdings) and Istithmar, a UAE-based private equity firm, would invest $20 million in the equity capital of SpiceJet, subject to it receiving the necessary approvals.

The investment, which is being made on the invitation of the SpiceJet board, would be as per the pricing formula laid down by the Securities and Exchange Board of India.

Mr Ajay Singh, Director, SpiceJet, told Business Line that both of themwere strong international players. While Temasek is owned by the Government of Singapore, Istithmar is owned by the Dubai Government. Further, the two have experience working with aviation companies.

"We believe that they are long-term players and will add strategic depth with their experience in the field of aviation," said Mr Singh.

The $20-million preference issue locks in the investment for 12 months and gives the two players about 6 per cent equity in the company.

According to Mr Singh, the preference issue is part of the company's effort to raise $95-100 million. It proposes to raise the remaining $75-80 million by way of an FCCB issue in a few weeks.

The current paid-up capital of the company stands at Rs 160 crore or 16 crore shares. This would increase to Rs 190 crore following the FCCB conversion.

MacRitchie Investments, headquartered in Singapore, manages a diversified global portfolio of S$90 billion, spanning Singapore, Asia and the OECD economies. Its investments fall in a range of industries including telecommunications and media, financial services, property, transportation and logistics, energy and resources, infrastructure, engineering and technology, as well as pharmaceuticals and biosciences.

Temasek has links with several Singapore-based companies including listed firms such as Singapore Airlines, SingTel, DBS Bank, SMRT Corporation and Neptune Orient Lines. Its investments in India include ICICI Bank, Matrix Laboratories, Tata Consultancy Services, Punj Lloyd, Welspun Industries and Mahindra and Mahindra. The UAE-based Istithmar, also an investment house, focuses on private equity, real estate and alternative investments. The company's "I" investment philosophy is based around three core principles — Ideas, Inquiry & Integrity. .

Istithmar's investment in SpiceJet, its first investment in the Indian subcontinent, is in line with the company's strategy to identify projects with a strong potential for success. SpiceJet said it would seek the required permissions for accepting these investments, including shareholders' approval for allotment of equity shares on a preferential basis. It has also received a positive response for its proposed FCCB issue. The issue is expected to be completed shortly.

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