SpiceJet Ltd., an Indian budget airline, will likely to sell a foreign currency convertible bond worth $90 million by early September to raise money for more plane purchases, a company executive said Wednesday.
Upon maturity, the bonds will be converted to stocks totaling about 17 per cent of the company, Ajay Singh, the airline's director, told Dow Jones Newswires.
SpiceJet, which mainly competes with Air Deccan, India's first low-cost carrier, was started in May by the Britain-based Kansagra family, who also operate a chain of hotels in London. The airline currently flies to to six cities in India.
"It (bond issue) will lead to dilution of promoters' stake but not to a level where there is a controlling issue," said Singh.
Singh said SpiceJet is likely to add at least two more Boeing 737-800 planes on lease by December. It is also expected to receive in January of the first of 10 new Boeing 737-800 planes it ordered early this year.
For decades, air travel in India had been expensive and largely dominated by state-owned carriers. But several new budget carriers have been attracting first-time flyers and aviation experts expect business to grow by 25 per cent per year.
In the fiscal year that ended March 2005, some 16 million plane tickets were sold in India.
© 2025