SpiceJet plans to mop up funds via FCCBs

Budget carrier SpiceJet, planning to buy 30 aircraft in the next three years, today said it was considering various options, including foreign currency convertible bonds (FCCBs) to raise funds.

"Between September and December, four planes will be delivered by Boeing for which we need funds. At the moment, we are considering various options, including foreign currency convertible bonds and loans from Exim Bank," said Ajay Singh, director, SpiceJet, here today.

He said the airline is likely to take a final decision on the issue by July-August. The carrier looks to clock 3,60,000 passengers by the end of this calendar year.

SpiceJet, which operates about 40 flights a day, is also looking at substantially increasing this number.

Although he did not comment on the amount that the airline is likely to mop up through various options, it is estimated that the first set of four planes will cost about $100 million.

Singh said the airline would be getting a leased aircraft by May, taking its fleet to six. He said the planes to be delivered are Boeing 737-800s, and that the airline is not looking at purchasing smaller planes.

He said SpiceJet is looking to up its market share to 10 per cent from the current 6.5 per cent by the year-end. It also plans to double the numbers of passengers to 3.6 lakh by that time.

The airline today tied up with SBI Card to issue co-branded credit card in association with Mastercard International for its passengers. "The card is basically aimed at customer loyalty programme as well as providing value to first-time customers," Singh said.

In September last year, SpiceJet placed $70 million FCCB issue at the Luxembourg Stock Exchange. The carrier has also converted some of the funds into equity and has reduced FCCBs from $90 million to $70 million.

The FCCB holders will have the option of converting the instrument into equity shares within 10 years at a pre-determined price.