SpiceJet says foreign investors interested; share price soars

Jan 16 2013, 01:24 IST
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SummarySpiceJet on Tuesday confirmed foreign players had shown interest in acquiring a stake in the company after a recent rule change allowing foreign carriers to buy stakes in domestic airlines

SpiceJet on Tuesday confirmed foreign players had shown interest in acquiring a stake in the company after a recent rule change allowing foreign carriers to buy stakes in domestic airlines. However, it said it was premature to comment on the possibility of selling shares to any investor.

“(A) few investors have evinced interest in the company post Government of India allowing FDI (foreign direct investment) in the civil aviation sector to foreign airlines,” SpiceJet said in a statement to the Bombay Stock Exchange. “It will be very premature to comment on the possibilities of any fresh equity issuance to such interested parties or confirm/deny names of any specific entity,” the company added.

Shares of Spicejet rose 4.09 per cent to close at Rs 45.85 on the BSE. During the day, shares of the company gained 8.51 per cent to Rs 47.80. Meanwhile, in a statement on Tuesday, Qatar Airways CEO Akbar al-Baker denied it was involved in any discussions for a possible investment. “Qatar Airways categorically denies it is interested in investing in Spicejet or any other Indian airline,” Akbar al-Baker said in a statement. “This is pure speculation by individuals who deliberately want to spread such unfounded rumours to raise the stock value of their entities.”

Al-Baker said Qatar Airways would only look at investing in India once it believed that laws and regulations in the country had been “properly liberalised”.

In September 2012, the government allowed foreign airlines to buy a maximum 49 per cent stake in local carriers, opening the prospect of its battered airlines getting fresh funding. Jet Airways is in talks with Abu Dhabi’s Etihad Airways to sell a stake, it said earlier this month, in what could be the first deal in the sector following the rule change.

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