Fund Infusion To Help Budget Carrier Clear Debt And Meet Working Capital Requirement
SPICEJET, the country’s secondbiggest low-cost carrier, on Monday announced that Goldman Sachs and WL Ross have agreed to invest $100 million in the company. WL Ross will invest $80 million, while the remaining $20 million will be brought in by Goldman Sachs. After the transaction, WL Ross will send two representatives — its chairman & CEO Wilbur L Ross Jr and managing director and CEO of its Indian operations Ranjeet Nabha — to the SpiceJet board. investors in the low-cost model that SpiceJet has chosen to follow.”
WL Ross chairman & CEO Wilbur L Ross Jr said: “This financing is intended to give SpiceJet the staying power to get through the industry consolidation that is underway. We also gain encouragement from the fact 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 stabilise the industry.”
The fund infusion is aimed at clearing the budget carrier’s debt as well as meeting its working capital requirements. SpiceJet owes around Rs 55 crore to its creditors. SpiceJet is under margin pressure following a 50% jump in jet-fuel pricesthisyear.Theinvestorshavegiven their thumps up to the announcement. The SpiceJet stock went up 5.58% to close at Rs 30.25 on Monday on BSE.
Last month, WL Ross had announced an investment of $80 million in SpiceJet. But the delay in signing a definitive agreement to this effect caused speculation on the certainty of the deal. There were rumours that a third investor might enter SpiceJet if the deal with WL Ross did not happen.
SpiceJet suffered a net loss of Rs 127.5 crore for the fourth quarter ended March 2008.
SPICEJET, the country’s secondbiggest low-cost carrier, on Monday announced that Goldman Sachs and WL Ross have agreed to invest $100 million in the company. WL Ross will invest $80 million, while the remaining $20 million will be brought in by Goldman Sachs. After the transaction, WL Ross will send two representatives — its chairman & CEO Wilbur L Ross Jr and managing director and CEO of its Indian operations Ranjeet Nabha — to the SpiceJet board. investors in the low-cost model that SpiceJet has chosen to follow.”
WL Ross chairman & CEO Wilbur L Ross Jr said: “This financing is intended to give SpiceJet the staying power to get through the industry consolidation that is underway. We also gain encouragement from the fact 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 stabilise the industry.”
The fund infusion is aimed at clearing the budget carrier’s debt as well as meeting its working capital requirements. SpiceJet owes around Rs 55 crore to its creditors. SpiceJet is under margin pressure following a 50% jump in jet-fuel pricesthisyear.Theinvestorshavegiven their thumps up to the announcement. The SpiceJet stock went up 5.58% to close at Rs 30.25 on Monday on BSE.
Last month, WL Ross had announced an investment of $80 million in SpiceJet. But the delay in signing a definitive agreement to this effect caused speculation on the certainty of the deal. There were rumours that a third investor might enter SpiceJet if the deal with WL Ross did not happen.
SpiceJet suffered a net loss of Rs 127.5 crore for the fourth quarter ended March 2008.
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