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Spicejet receives several proposals to buy into budget airline

Bloomberg New Delhi | Updated on June 03, 2019

SpiceJet, which almost shut down in 2014 after running out of cash, scripted a comeback since original co-founder Singh played the white knigh   -  Getty Images

SpiceJet is India’s biggest budget airline after InterGlobe Aviation Ltd’s IndiGo

SpiceJet Ltd has received many proposals to buy into the company, and the budget carrier is willing to evaluate an offer only if its strategic, its chairman and majority shareholder said.

At an interview held during an industry conference in Seoul, SpiceJet’s owner - Ajay Singh - said that SpiceJet has enough cash. “We have to see if this serves SpiceJet’s long-term interests, and when we come to that determination, well do something. These are typical in a situation when an airline is doing well and the market is as promising as India,” he explained.

SpiceJet, which almost shut down in 2014 after running out of cash, scripted a comeback since original co-founder Singh played the white knight. The shares jumped almost 64 per cent this year, hovering near their all-time high. This was due to the grounding of the debt-laden Jet Airways India Ltd. The incident had let the no-frills carrier increase capacity and market share.

SpiceJet is India’s biggest budget airline after InterGlobe Aviation Ltd’s IndiGo.

This year, SpiceJet is due to receive cash by selling planes to leasing companies, Singh said.

Singh founded SpiceJet in 2004 and sold it six years later to a regional media baron. When the carrier was on the brink of collapse, Singh bought it back and revived the airline by renegotiating contracts with vendors and cutting unprofitable routes. Crashing oil prices also helped him embark on an ambitious expansion, eventually giving the airline a market value of $1.3 billion.

“Now is probably not the time for a sale of stake for cash, said Singh”, who holds almost 60 per cent of the airline.

“We are always happy to hear what is on offer, but there is nothing imminent, nothing that we are doing right now,” he said.

Published on June 03, 2019

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