The Hindu Business Line : SpiceJet denies in talks for stake sale

Senior airline officials told Business Line that the two largest private shareholders in the low cost carrier - Istithmar, the private equity arm held by Government of Dubai and the Tata Group - by law cannot sell their stake in the airline till February next year.

Both were issued preferential shares in February 2007 and Securities and Exchange Board of India (SEBI) guidelines prevent them from selling their holding within a year.

"The Kasangra family, which also has a major stake has signed an agreement with the two largest share holders that prevents it from divesting its stake till February next year. The airline is sitting on a cash pile of over $30 million even after it has made payment for the aircraft it is to receive, so why should it look to issue more equity," a senior airline official argued.

At present Istithmar holds 13.42 per cent stake in the airline, followed by the Kasangra family at 12.9 per cent, Tata (6.24 per cent) and BNP Paribas (5.43 per cent).

The airline hopes to have a fleet strength of 20 aircraft offering close to 24,000 seats a day, which it feels is enough to sustain profitable stand alone operations.

"Earlier, when the airline did not have promoters with deep pockets there could have been a reason to sell. But no one can say that either the Tatas or Istithmar group do not have deep pockets. Besides, the other promoters who have smaller stakeholding are hardly likely to sell when the airline is offering 24,000 seats a day, which by global standards is what a medium sized airlines would offer," airline officials argued.

In the recent past there have been reports that various airlines and groups have shown an interest in picking up a stake in SpiceJet.

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