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WL Ross invests in Indian budget carrier

SpiceJet, an Indian budget airline has landed an $80m investment from distressed specialist WL Ross, in what is the firm's second investment in the country.

WL Ross, the distressed investment shop, is investing 3.45 billion Indian rupees ($80 million; €50 million) in SpiceJet, an Indian budget airline listed on the Bombay Stock Exchange. The firms said in a statement that the agreement is subject to approvals that may be required.

The agreement comes after months of speculation with regards to investors' interst in acquiring a stake in the carrier. In the past few months, Indian media reports have suggested that other Indian airlines such as Kingfisher, Jet and Paramount are vying for a stake in SpiceJet. It has been reported that the airline has also drawn the interest of Anil Ambani, the younger Ambani brother and chairman of Reliance-Anil Dhirubhai Ambani Group (R-ADAG).

With a 10 percent market share, SpiceJet is currently India’s second largest budget airline. It has a fleet of 15 aircraft and operates 94 flights in the country daily.

Wilbur Ross Jr., chairman and chief executive officer of WL Ross, said in a statement: “We believe in the long term validity of the low cost airline model in India and that fuel prices eventually will stabilise.” Ross and Ranjeet Nabha, managing director and chief executive officer of WL Ross India, are expected to join the company’s board following the transaction's completion, the firms said.

Further details of the deal have not been disclosed. NM Rothschild & Sons advised SpiceJet on the deal.

The investment is WL Ross’ second in India, following its acquisition in 2006 of OCM India, a worsted textile manufacturer, for approximately $37 million.

In India, the firm is based out of Mumbai, where it opened an office in May 2006. WL Ross has an agreement with India’s Housing Development Finance Corporation, which assists it in sourcing and evaluating private equity opportunities in the country.

WL Ross manages assets of approximately $7.9 billion.