Mumbai, Aug 12: SpiceJet Limited, largest domestic budget airline, and WL Ross&Co LLC, a global private equity investor, have announced execution of definitive documents for a funding transaction with WL Ross and others.
Completion of the transaction will make available up to Rs 421 crore (USD $100 million) to SpiceJet. This is higher than the Rs 345 crore (USD $80 million) proposed earlier and has been made possible partly through the participation of Istithmar World Capital and SpiceJet Director Ajay Singh, a release said on Tuesday, Aug 12.
The infusion of capital will take place in two successive tranches. Completion of the funding of the first tranche is subject to certain conditions, which are expected to be fulfilled in the next two weeks. The remainder of funding will be received after shareholders' approval, which the Company will seek shortly. As part of the transaction, Goldman Sachs has agreed to subscribe for equity warrants in the Company under the preferential issue guidelines of SEBI and subject to requisite approvals.
Mr Bhulo Kansagra and Mr Ajay Singh, Board Members of SpiceJet, said, ''We are delighted that such a large amount of funding has been made available to SpiceJet at a challenging time for the aviation industry in India. This investment validates the confidence of our investors in the low cost model that SpiceJet has chosen to follow.''
Mr Wilbur L Ross Jr, Chairman&CEO, WL Ross&Co LLC said, ''This financing is intended to give SpiceJet the staying power to get through the industry consolidation that is underway. We also gain encouragement that oil prices have been abating and that the government has appointed a Committee under the Chairmanship of the Cabinet Secretary to recommend measures to stabilize the industry.'' Mr. Ranjeet Nabha, Managing Director&CEO of WL Ross India said, ''We have worked closely with the promoter group and Istithmar World Capital to provide SpiceJet with a strong capital base that will enable it to emerge from the current down turn and be recognized and admired, not only in India, but on the global stage.'' Mr Ross and Mr Nabha are expected to join the Board of Directors of SpiceJet.