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Mon 3 Jun 2019 10:13 AM

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SpiceJet says has 'offers' for stake in Indian airline

SpiceJet chairman Ajay Singh says willing to evaluate an stake offer only if it's strategic

SpiceJet says has 'offers' for stake in Indian airline

SpiceJet Ltd has received many proposals to buy into the company, and the Indian budget carrier is willing to evaluate an offer only 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.”

SpiceJet, which almost shut down in 2014 after running out of cash, scripted a comeback since original co-founder Singh played the white knight.

The shares have jumped about 70 percent this year, hovering near their all-time high, as the grounding of debt-laden Jet Airways India let the no-frills carrier increase capacity and market share. SpiceJet is India’s biggest budget airline after InterGlobe Aviation’s IndiGo.

This year, SpiceJet is due to receive cash by selling planes to leasing companies, Singh said.

SpiceJet shares rose as much as 7.5 percent to 156.90 rupees in Mumbai and traded at 153.70 rupees, the highest since December 2017, as of 10.06am local time.

Singh founded SpiceJet in 2004 and sold it six years later to a regional media baron. When the carrier was on the brink of collapse, Singh bought it back 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.

“Now is probably not the time for a sale of stake for cash,” said Singh, who holds almost 60 percent 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.”

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