New Delhi: After Jet Airways and Kingfisher Airlines, a third bidder entered the race for SpiceJet on Monday after the Coimbatore-based Paramount Airlines offered to buy a 26 per cent stake in the low-cost airline.
SpieceJet, India's second biggest low-cost airline after Air Deccan, is reportedly up for takeover as its promoters want to exit the business within a month or two. The SpiceJet management has, however, denied any plans to sell any stake.
While Jet Airways was reportedly in talks with SpiceJet initially, liquor baron Vijay Mallya later joined the race when he expressed interest in picking up a stake in the airline. And now comes the decision of Paramount Airways to make an open offer to buy 26 per cent stake in SpiceJet.
Paramount, which operates only in South India, has a 0.3 per cent share. The Paramount-SpiceJet deal is valued at Rs 500-600 crore. Sources say Paramount has the backing of Kotak for the deal. Paramount also plans to fund the deal through internal accruals and debt.
Paramount Airways plans to run SpiceJet as a separate entity in the low-cost space as opposed to Paramount Airways, which is only a business-class airline. SpiceJet currently has a 9 per cent market share in the domestic aviation sector.
Paramount sources said the due diligence for SpiceJet is already in progress and the airliner is likely to make an open offer shortly.
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