The investment arm of the emirate of Dubai, Istithmar has sold most of its 13.4% stake in the domestic low cost carrier SpiceJet. This move is most likely fallout of the financial crisis faced by the emirate during recent months.

On Friday, Istithmar sold the stake for Rs 170 crore in two block deals at Rs 53.75 per share. About 66% of this stake was purchased by domestic mutual funds and the remaining by a foreign Institutional investor.

SpiceJet officials said about 3.1 crore of the total 3.2 crore shares held by Istithmar were sold by it. However it still holds $12 million worth of foreign currency convertible bonds.

SpiceJet currently operates 19 aircraft and the company plans to raise it to 25 by the year-end. The airline will complete five years in operations making it eligible to operate international flights. SpiceJet plans to start operation to neighboring countries after it is allowed to travel in international skies.

The director of SpiceJet Ajay Singh has said that the sale of the stake has shown that the investors have faith in the company. The airline is planning to raise funs through the markets soon.

Earlier Istithmar has indicated that it is planning to raise its stake to $50 million from $12.5 million through foreign currency convertible bonds.