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SpiceJet Ltd. has received several proposals to buy into the company, but the Indian budget carrier is only willing to evaluate an offer if it’s strategic, its chairman and majority shareholder said.
“SpiceJet has enough cash,” Ajay Singh said in an interview, while attending an industry conference in Seoul. “We have to see if this serves SpiceJet’s long-term interests, and when we come to that determination, we’ll do something. These are typical in a situation when an airline is doing well and the market is as promising as India.”
India will need 2,300 new aircraft worth $320 billion in 20 years, Boeing forecast in February, as an emerging middle-class flies for the first time. Racing to extend its share of that market is SpiceJet, the country’s second-biggest no-frills carrier, which had almost shut down in 2014 after running out of cash.
Singh, who started SpiceJet in 2004 and sold it six years later to a regional media baron, repurchased and revived the airline by renegotiating contracts with vendors and cutting unprofitable routes. Crashing oil prices also helped him embark on an ambitious expansion, eventually giving the airline a market value of $1.3 billion.
The collapse of debt-laden Jet Airways India Ltd. gave SpiceJet an advantage over bigger rival IndiGo, run by InterGlobe Aviation Ltd. SpiceJet flies the same Boeing 737 family of aircraft as Jet, making it easier for the company to take over those planes.
SpiceJet shares have jumped about 70% this year, hovering near their all-time high. The stock rose as much as 7.5% to 156.90 rupees in Mumbai and traded at 153.60 rupees as of 2:24 p.m. local time.
This year, SpiceJet is due to receive cash by selling planes to leasing companies, Singh said. “Now is probably not the time for a sale of stake for cash,” said Singh, who holds almost 60% of the airline. “We are always happy to hear what’s on offer, but there’s nothing imminent, nothing that we are doing right now.”
©2019 Bloomberg L.P.