Praveena Sharma 
 
Bangalore: The London-bassed Kansagras, promoters of SpiceJet Ltd, who have around 13% stake in the budget airline, are looking to exit.

According to sources, Bhupendra Kansagra, who, along with his family, holds the stake through family firm Royal Holdings Services Ltd, is scouting for a buyer and has initiated talks with “several interested parties”.

They want to exit the airline business because rising aviation turbine fuel prices are hurting the bottomline.

“They (Kansagras) feel exorbitant jet fuel prices is making the business model of low-cost airlines commercial unviable,” said the source.

Moreover, since the lock-in period for their stake was over, it makes it easier for them to cash out. The lock-in period of the Kansagras expired on February 7.

People familiar with the situation said the no-frill airline promoters had approached SpiceJet director Ajay Singh, the United Arab Emirates-based private equity firm Istithmar and the Ruias of Essar Group for a stake sale.

All the three, apparently, declined the offer.

SpiceJet executive chairman Siddhanta Sharma, while denying the development, said it was technically not possible for Istithmar, which has close to 14% stake in the airline, to buy the Kansagras’ stake without making an open offer.

As per the Securities and Exchange Board of India takeover code, any investor breaching the 15% limit in a company has to make an open offer to buy majority stake.

“Yes, the lock-in period of the Kansagras got over on February 7, but they are not interested in divesting their stake,” said Sharma.

SpiceJet director Singh also said that the promoters would not be interested in cashing out at the current valuation. “They would not want to sell out at the current price,” said Singh.

Kansagras had bought SpiceJet shares at Rs 10 each in 2001. On Monday, they closed at Rs 38.15. The share had seen a 52-week high of Rs 104.80 on January 8 and a 52-week low of Rs 37.30 on March 26.

Source : DNAIndia