TPG Capital may acquire a minority stake in Spicejet Ltd as the budget carrier plans to raise upto $270 Mn to expand it's fleet size.

The company had ordered 15 Bombardier's at a list price of $450 Mn in December'2010. The company had initially tied up a loan of around $250 Mn from Export Development Canada for the purchase, but there has been a delay as Spicejet was unable to get the clearance from RBI for the funding. Each of the 15 Bombardiers will have individual loans payable over 12 years.

Transaction Reference: IndiaInfoline

The company is also adding five more Boeing 737s to it's existing fleet of 30 Boeings by May next year. It plans to have a fleet of 70 aircraft, a mix of 45 Boeing and 25 Q400 planes, by the end of 2013.

Spicejet also has an option of buying 15 additional aircrafts from Bombardier in the next three years. These 70 seat Q400s will be used for it's regional operations.

Spicejet is controlled by Kalanithi Maran of SunTV, who bought 37.75% stake in the company from Bhupendra (Bhulo) Kansagra and Wilbur L. Ross in 2010. It currently operates 202 flights per day, of which four are international. It has commenced operations to two international destinations last year and flies to 22 destinations in the domestic market.

The launch of regional operations will make SpiceJet a rival of full-service carriers Kingfisher Airlines Ltd, Jet Airways (India) Ltd and Air India Ltd, which operate in the small-town routes with 27, 20 and 11 short-haul aircraft in their fleet, respectively.

These three airlines fly either Turboprop ATRs or Bombardier CRJs on these routes. The government charges a lesser tax of 4% on fuel for aircraft with less than 80 seats, compared with up to 30% for aircraft such as the Airbus A320 and Boeing B737. It also waives landing and parking charges at airports for the smaller aircraft.


Nusli Wadia's GoAir is also planning 72 aircrafts starting 2015. It's current order book is of 92 aircrafts. GoAir was in talks with various domestic and foreign institutional investors to raise upto $100 Mn for it's aircraft acquisition programme, but the deal seemed to have fallen through.

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