Wilbur Ross appointed as Director on SpiceJet board

Low-cost carrier SpiceJet today said Wilbur Ross has been appointed director on the board of the company, along with Ranjeet Nabha of the private equity firm led the billionaire investor.

"Wilbur Ross and Ranjeet Nabha of WL Ross & Co LLC have been appointed as directors on the board of the company with effect from January 31, 2009," the company said in a filing to the Bombay Stock Exchange.

This development follows an investment of 80 million dollars (about Rs 345 crore) the PE firm had made in the carrier last July. It was aimed at clearing the budget carrier's debt as well as meeting its working capital requirements.

Ross holds foreign currency convertible bonds (FCCBs) that can be converted into equity by December 2010. If he chooses to exercise his option, he could become owner of up to one-third (up to 32 per cent) of carrier Spicejet by the next year.

Government regulations currently allow only up to 49 per cent foreign direct investment and 100 per cent investment by a non-resident Indian through the automatic route.

The Dubai government's private equity arm Istithmar owns 13.4 per cent of the carrier, while FIIs hold about 10 per cent equity in the company.

Besides WL Ross & Co, global financial services major Goldman Sachs had also put in 20 million dollars to bail out the cash-strapped company last year. Goldman Sachs was given equity warrants in December 2008, which had a lock-in period of one year.

As per the latest shareholding pattern as on December 31, 2008, foreign promoters hold about 12.89 per cent equity in the company, while some non-promoter foreign companies have about 13.4 per cent equity in SpiceJet.