Hot on the heels of Jet Airways and Etihad getting the approval from the foreign investment promotion board (FIPB) to go ahead with their deal, Kalanithi Maran-owned SpiceJet is said to be close to finalising a foreign airline for a stake sale.
On Wednesday, speculation gained ground that Emirates is about to agree to purchase 15-20% stake in SpiceJet.
However, the report was denied by Emirates while SpiceJet said that it cannot comment on speculation.
Emirates had earlier been linked with a stake purchase in SpiceJet last year, but the deal failed to materialise as the Dubai-based airline pursued a controlling interest in the low-cost carrier.
“SpiceJet is in advanced talks with an investor and should soon make an announcement on the same but the investor is not amongst the names that have floated around in the media,” said a person in the know of the development on condition of anonymity.
The Maran-owned carrier has in the past been linked to Qatar Airways, Emirates and Kuwait Airways.
After reports came out earlier this month suggesting Kuwait Airways will buy a 25% stake in the airline, SpiceJet said, “We reiterate that few investors have evinced interest in the company post government of India allowing FDI in civil aviation sector to foreign airlines, but it will be very pre-mature to comment on the possibilities of any fresh equity issuance to such interested parties or confirm/deny names of any specific entity.”
Investment banking officials said that a SpiceJet stake sale to Gulf low-cost carriers is more likely than Emirates buying into the airline.
“Emirates has a premium business model which doesn’t fit with SpiceJet,” said an investment banker with Enam. The person is not associated with SpiceJet in any manner and the comments were not specific to any possible investment.
“SpiceJet’s business model fits in better with the likes of flydubai which has seen a rapid growth since its launch in 2008, or Air Arabia which has earmarked investments for acquisitions. Lufthansa also have recently stated that they may start a long-haul low cost arm which would need a partner from South Asia.”
SpiceJet’s shares which hit a 52-week high of R50.90 on December 7, 2012 have significantly shed value. On Wednesday, the airline’s shares closed almost flat, 1% higher, at R27.30.