Bidders are queueing up for a stake in SpiceJet. Apart from Vijay Mallya-promoted UB Group, the airline, is also negotiating US-based distress fund owner Wilbur Ross. But differences in valuation have not led to much headway with either of them and the airline could end up in different hands, said market sources.
Airline promoters, who helped build one of the most efficient low-cost carrier (LCC) that today enjoys a 10% market share, are looking for a good value. The Anil Ambani-led ADAG has been keen on entering the airline sector and tried its luck with Air Deccan last year. If SpiceJet promoters don't lock the deal with Mallya or Ross, they may end up with ADAG or some other big players with deep pockets. The deal is likely to come through by this month-end.
But why is everyone so desperate for SpiceJet in these tough times when aviation is a loss-making business? "Today Kingfisher-Deccan and Jet-JetLite combines are neck-and-neck with almost 30% market share each. Getting SpiceJet's 10% and then some other small acquisitions like a GoAir will make the successful bidder the clear and undisputed market leader. He can dictate the fares in the market. That's why Mallya wants SpiceJet and other players are trying to ensure it doesn't land in his lap," said a top industry player.
According to the top player, Mallya had almost clinched the deal last week when things changed suddenly. "It could have been either difference in valuation or some other player's intervention," said the player. At the current share price, the airline is valued at over Rs 600 crore and acquiring the 26% stake that's held by two promoters would mean paying up nearly Rs 155 crore.
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