Dubai debt crisis may have impact on SpiceJet

Istithmar, the private-equity arm of the Government of Dubai, invested USD 12.5 million dollars in SpiceJet in the early 2005 reports CNBC-TV18's Sonia Shenoy. The street is having some concerns about Istithmar liquidating of this particular stake.

We have spoke to a whole host of analyst who track SpieJet very closely and they said that this is purely a sentimental impact. One needs to wait and watch what kind of impact this would have -- indeed of course SpiceJet is looking to raise money. So that maybe a bit of a concern going forward. But of course then that concern lies with every company that would have exposure to the UAE. It is too early to predict at this point in time that is what some of the analyst have really told us.

Background:

Istithmar had about invested USD 12.5 million. Then it renegotiated its FCCB conversion price to about Rs 57. After the fall in the equity market it was said that Istithmar was trying to again negotiated as another decrease in the conversion price to about Rs 30 per share. Finally what it preferred to do was to encash the bond and sell about USD 25 million worth of these bonds to WL Ross. Istithmar nominees on SpiceJet's directorial board had now been replaced by WL Ross nominees. So the concern of course does remain that incase SpiceJet goes on to raise money or is looking to raise capital which it is, then there maybe no space for WL Ross to encash the bonds.