PE firms likely to invest in SpiceJet soon

Two foreign private equity firms have expressed interest in buying stake in Kalanidhi Maran-led no frills carrier SpiceJet and the airline is close to signing a term sheet with one of the two private equity companies, reports CNBC-TV18’s Shereen Bhan.

The airline’s management told Bhan that they would prefer a deal with a foreign carrier provided foreign direct investment norms permit to do so. Neil Mills, CEO of the company, denied rumours that Emirates, Air Asia and British Airways are picking up stake in SpiceJet. “The managements of these three companies have said that the risk reward ratio currently does not merit an investment in a domestic Indian carrier,” he said. However, he agreed that foreign carriers have expressed interest in picking up a stake in SpiceJet if the regulations do change.

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He also said that SpiceJet will become the first company to actually start direct air turbine fuel (ATF) imports by Juky 2012. SpiceJet has now tied up with multiple third party and expects to save 1 percent of the total fuel bill with the help of direct imports.

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Mills added that the company has seen reductions in ATF prices but rupee depreciation has negated the reduction in ATF prices up until last week.