SpiceJet raises $80 m via FCCBs

Low-cost carrier SpiceJet has raised $80 million through the issue of foreign currency convertible bonds (FCCBs) in the international market. The subscribers to the bond issue include investment banker Goldman Sachs and Dubai-based private equity firm Ishtithmar.

Ishtithmar was recently in the news for the purchase of property in Manhattan, New York, valued at $705 million. Earlier, Ishtithmar had subscribed to preferential equity in SpiceJet to the tune of $12.5 million at a price of Rs 89.30 per share. The bond holders have the options to convert the bonds into shares at a substantial premium over Monday's closing price at Bombay Stock Exchange.

SpiceJet said the bonds would be listed at Luxembourg Stock Exchange. The funds raised from this issue would be utilised to part finance the fleet expansion plans. SpiceJet has placed orders for 20 Boeing 737-800 aircraft (10 firm & 10 option).

Ajay Singh, director of SpiceJet, said, "We received a large number of offers for subscribing to our bonds. We have chosen to issue these bonds to blue-chip investors who can play a long-term role in the growth and development of our company. The bond issue will further strengthen the financial position of SpiceJet and enable it to achieve a leadership position in the aviation space in India."

SpiceJet recently inducted two more Boeing 737-800 aircraft in its fleet and increased its capacity from 4,500 seats to over 6,600 seats a day.

SpiceJet intends to add eight to 10 aircraft in 2006. During the last six months since its launch, the airline has operated with the highest load factor in the industry. SpiceJet is planning to enhance its fleet aggressively and would induct about 30 aircraft in next three years.