The three foreign investors in the country’s second-largest low-cost airline SpiceJet –– Wilbur Ross, Goldman Sachs and the government of Dubai’s Istithmar –– may become majority shareholders in the company by December this year. The three currently hold foreign currency convertible bonds (FCCB) and warrants, which would be converted into equity before the expiry of the bonds, SpiceJet CEO Sanjay Aggarwal told FE.
“It is pretty definite now that the investment will be converted into equity, which will also retire the entire debt of $90 million on our books, making us completely debt free,” he said. However, Aggarwal refused to comment on the route Ross may adopt to convert the bonds and warrants into equity. “It is for them to decide, we have not yet had any talks with them on the issue,” he said.
Ross, Goldman Sachs and Istithmar had together invested $100 million into the five-year old airline in 2008. Of this, Ross’s individual investment was $68 million. A part of the FCCBs were converted earlier into shares. His equity in the company currently stands at 0.025% with two board representations in SpiceJet. However, once the bonds held by the three are converted into equity later this year, their combined shareholding will go up to around 40.27% and the promoters’ (the London-based Kansagra family) holding would be reduced to 7.69%. In that scenario, the foreign shareholding in the company will go up to around 48%, just under the cap of 49%.
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