Monday, December 11, 2006

Tatas set to pick 7.5% in SpiceJet for Rs 90 cr

New Delhi: After an abortive bid to enter domestic aviation with Singapore Airlines almost a decade ago, Ratan Tata’s ambition to join the sector may finally become a reality, with his group set to take a 7.5 per cent stake in SpiceJet Ltd, the country’s sixth largest carrier. According to investment banking sources on Sunday, the Tatas are likely to offer Rs 60-65 a share of SpiceJet, about 25 per cent more than the price at which the shares are traded on the Bombay Stock Exchange.
Tatas will thus have to shell out about Rs 90 crore for buying 7.5 per cent in SpiceJet. The price puts the airline’s valuation at Rs 1,200 crore. The Tatas are likely to buy another 7.5 per cent in the company at a later date. As and when that happens, it would trigger the takeover code for a mandatory offer to the public to acquire a minimum of 20 per cent. The maximum stake in SpiceJet is owned by Ajay Singh, a director on the company board, followed by the London-based Kansagra family.
10/12/06 Press Trust of India/Indian Express