Jet and Kingfisher begin to circle SpiceJet for a stake

New Delhi: It may now be the turn of SpiceJet Ltd, India's second-biggest low-fare carrier, to go the way of Air Sahara and Air Deccan, judging by market rumours that local rivals Jet Airways and Kingfisher Airlines have begun circling around the carrier to pick up a stake. The reported moves by both these rivals comes on the back of earlier rumours that southern regional carrier, Chennai-based Paramount Airways, was also interested in a stake as part of its expansion plans.

According to market reports, Jet Airways is eyeing the stake held by Royal Holding Services Ltd and Dubai-based Istithmar, in SpiceJet. While these reports were carried by national daily, The Business Standard, another report by The New York Times cited Kingfisher chairman, Vijay Mallya, as saying that he too was interested in picking up a stake in SpiceJet.

While Royal Holding Services owns 12.91 per cent of SpiceJet, Istitmar holds 13.42 per cent.

Meanwhile SpiceJet has denied that any negotiations are on to sell a stake. "It's not true,'' SpiceJet chairman, Siddhanta Sharma, told Bloomberg News. "Royal Holdings is under the binding clause of the shareholder agreement, according to which it cannot sell the stake,'' Sharma clarified.

SpiceJet officials also said that the airline was well funded at present and that there were no plans on any equity sale by the company.

On the back of the denial by SpiceJet, Jet Airways chief executive officer, Wolfgang Prock-Schauer, was also quoted by newspapers as saying that no talks were being held with SpiceJet on a possible acquisition.

SpiceJet, which currently operates a fleet of 11 aircraft, intends to spend as much as $400 million to buy 10 new Boeing planes. It currently holds an eight per cent passenger share of the domestic market.