New Delhi: Budget carrier SpiceJet Ltd plans to raise up to $75 million through a share sale in India or overseas, its chief executive said on Tuesday, without giving a timeframe.
“With yesterday’s board approval (for raising funds through ADR, GDR or QIP), more options become available to us, because in the past we were only looking at preferential,” Sanjay Aggarwal told Reuters over the telephone.
SpiceJet has been approached by a few investors including the founder of Sun TV and an entity run by Anil Dhirubhai Ambani Group, according to media reports.
“We continue to receive proposals from investors. We continue to evaluate them but so far the company has not made any decision,” Aggarwal said.
Wilbur L Ross, who invested $80 million in Spicejet in July 2008 through foreign currency convertible bonds, is exploring exit options, as per media reports.
Aggarwal declined to comment on Ross’s proposed exit.
Stable Yield, International Prospects
SpiceJet reported a net profit of Rs274 million, against a loss of Rs78 million for the January-March quarter on a revenue of Rs560 crore, as air traffic surged.
Aggarwal said he expected FY11 to be better than last fiscal as demand remains strong and yields stable, and forecast a marginal rise in market share for the company from the current 12.3%. The airline plans to add five aircraft in the current fiscal as it expects India’s domestic air traffic to grow 16%.
“We don’t see right now any reason to increase the yields because at current prices, customers are coming back, travelling by air rather than taking the train,” Aggarwal said, adding the yields or average revenue per passenger, has been stable at low Rs3,000 level since mid-September.
As long as the fuel prices remain below $95 a barrel, the fares are unlikely to rise significantly, Aggarwal said.
The company is planning to start its international operation by mid to end-July, preferably to Sri Lank’a capital Colombo, Aggarwal said.