The Hindu Business Line : SpiceJet looking to raise Rs 400-cr equity capital

New Delhi, June 6 Low-cost airline SpiceJet is looking to raise about Rs 400-crore equity capital to part-finance aircraft acquisition plans and meet other operational expenses, a senior company official said.

The company is looking at a number of options including private equity, preferential allotment of shares or a rights issue to meet the capital requirements. No final decision has been taken on the route, even as plans are afoot to complete the capital raising programme by September this year.

The recent surge in international oil prices has impacted the operations and financial health of the airline like several others in the country.

The current equity of SpiceJet, which recently completed three years of operations, is Rs 240 crore. Asked whether one of the promoters Mr Bhulo Kansagra was planning to exit, sources said that at the moment the entire focus was on raising funds for the company.

Exit speculation

“The talk about Mr Kansagra exiting is absolute speculation. At this moment, the airline needs capital infusion. If Mr Kansagra was to exit, how does that benefit the airline, which like many others is going through a rough patch. A professional firm has been appointed to help raise the funds,” sources said.

On Friday, the airline’s share price closed at Rs 35.95 on BSE, a gain of 14.49 per cent over the previous day’s close. According to reports, Mr Kansagra, who owns more than 12 per cent of stake in the company, had bought shares at Rs 10 per share in 2000.

Trading volumes also surged to 1.16 crore shares on Friday against its two-week average of 21.96 lakh shares.

The stock has been witnessing turbulence on the bourses this year. After registering its 52-week high at Rs 104.8 on January 8, the stock nosedived to touch its year low of Rs 29.50 on the Bombay Stock Exchange on June 3.

At the end of March 31, the promoters’ (Royal Holding Services) stake in the company stood at 12.91 per cent, foreign institutional investors held 12.44 per cent, while mutual funds held 11.69 per cent.

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