Istithmar, the UAE private equity firm and MacRitchie Investments, Singapore, have agreed to invest a Dh73 million ($20 million) in SpiceJet.
This investment will be made according to the pricing formula laid down by the Securities and Exchange Board of India (SEBI).
Istithmar and MacRitchie Investments, a unit of Temasek, have expressed an interest in subscribing to the ongoing Foreign Currency Convertible Bond (FCCB) issue of SpiceJet.
SpiceJet, a low-cost airline, was launched earlier this year in India by Royal Airways, an offshoot of the now defunct Modiluft, a private airline.
The entry of SpiceJet is expected to intensify competion among India's growing budget airlines, to which Vijay Mallya's Kingfisher Air is expected to add capacity.
Dubai-based Istithmar, an affiliate of the Ports, Customs and Free Zone Corporation, focuses on private equity, real estate and alternative investments.
Istithmar's investment philosophy, based around three core principles ideas, inquiry and integrity sets the foundation for the firm which has a broad portfolio of highly successful companies in markets from North America to Asia to the Middle East.
Istithmar's investment in SpiceJet, its first investment in India, is in line with the company's strategy of identifying projects with a strong potential for growth and success.
Istithmar's affiliate companies include Nakheel, Dubai Metals and Commodities Centre and Tejari.
MacRitchie Investments is a wholly-owned subsidiary of Singapore's Tem-asek Holdings, which has significant investments in Singapore Airlines and low cost carriers such as Tiger Airways and JetStar Asia.
Temasek has invested in leading Indian companies such as ICICI Bank, Mahindra and Mahindra, Apollo Hospitals and Welspun India and views this investment in SpiceJet as a long-term strategic investment in the preferred low cost carrier of India.
SpiceJet announced it will be seeking the required permissions for accepting these investments, including shareholders' approval for allotment of Equity Shares on a preferential basis.
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