SpiceJet needs funds, says Kalanithi
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Sun Group today said its aviation venture SpiceJet needs capital for expansion and would explore options including equity contribution from existing shareholders and raising debt, but promoters have no plans to sell their shares.
Sun Group chief Kalanithi Maran and his wife Kavery Maran have resigned from one of the promoter entities of SpiceJet, triggering speculations about a possible sale of Maran family's majority stake in the air carrier.
The group has, however, denied any plans for promoters' stake sale in SpiceJet, saying it could consider various other options to raise capital to finance fleet expansion plans.
"We certainly need funds for fleet expansion and whenever there is an attractive opportunity (for partial stake sale), we will definitely look at it, but there is nothing on cards as of now," Sun Group CFO S L Narayanan said.
Asked about the available financing options, Narayanan said it can look at debt, lease finance and funding from existing shareholders, among others.
"We will go for right type of financing at right time and right cost. We do not want risky and costly funding, but as we go into 2013-14, we will definitely require capital," he said.
SpiceJet has been working on adding new destinations in domestic markets as well as on international routes to its network. It currently commands a market share of 19.1 per cent among the domestic players in the country.
It is operating more than 300 daily flights to 38 Indian cities and 4 international destinations through a fleet of 36 Boeing and 12 Bombardier planes. Recently, it was allowed to operate flights to some new international destinations.
SpiceJet shares were trading 3.3 per cent higher in mid-day trade at Rs 36.10 at the BSE.
Asked about the size of capital required by the airline, Narayanan said the quantum of funding requirement would be clear by March next year, as SpiceJet is currently having a re-look at its fleet plans, as the growth has slowed down a bit, although load factor has improved.