The troubles of ailing SpiceJet may finally be over . The airline’s co-founder Ajay Singh has signed an agreement with Sun Group Chairman Kalanithi Maran as well as KAL Airways, who control 53 percent stake in the airline to take over ownership and control of the low-cost carrier. Financial details were not available.
The transfer is part of the scheme to restructure and revive the airline.
Singh, a businessman credited with coining Prime Minister Narendra Modi's winning campaign slogan, "acche din" (good days), so far owned about 5 percent in SpiceJet.
Sources had told Firstpost yesterday that a clutch of investors led by Singh, who helped set up the low-cost airline in 2005, and investment bank JP Morgan are likely to inject around $250 million ( Rs.1,550 crore) in the ailing airline.
"The Board has further directed the Company to take further steps to implement and undertake all necessary steps including to make the appropriate application before the Ministry of Civil Aviation, Government of India for seeking approval of the ‘Scheme of Reconstruction and Revival for the takeover of ownership, management and control of SpiceJet Limited," SpiceJet said in a statement.
SpiceJet needs an immediate infusion of about Rs 2,000 crore to survive.
SL Narayanan, CFO Sun Group, told CNBC-TV18 that the company will wait for the nod from the aviation ministry before making any further announcements about the deal between SpiceJet and Ajay Singh. Moreover, induction of new investors and board members will be dealt with by Singh, Narayanan added.
Sources told Firstpost that the Marans have not paid any of the Rs 1250 crore liabilities of Spicejet
They will move out of Spicejet "after making some money" but no where close to the amount they invested, they said.
Maran had bought a majority stake in SpiceJet from its promoter Bhupendra Kansagra and distressed-assets buyout specialist Wilbur L Ross in 2010.
With the deal close to being finalised, the civil aviation ministry is also expected to extend the credit time to pay dues to state-run Airports Authority of India to the end of this month.
SpiceJet, which remained grounded for almost one full day in December last year because of the cash crunch, has already allowed to 43 of its pilots to leave the airline without serving the mandatory six-month notice period.
The airline has reduced its Boeing plane fleet to almost half from 35 in July last year.
Loss-making SpiceJet, which began life in 2005, employs around 5,000 people and operates 230 flights a day in a market where demand for air travel is rising rapidly but making a profit has proven difficult for most major airlines.
Kapil Kaul, CEO- South Asia, India Subcontinent, Centre for Asia-Pacific Aviation (CAPA) termed the deal lifesaving for Spicejet. "They were lucky actually, this is a blessing in disguise. It was timely." Kaul was candid enough to say that he was uncertain if this will finally get translated into an agreement. Spice would not have survived had Ajay Singh not stepped in, he told CNBC-TV18.
With inputs from Agencies
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Updated Date: Jan 16, 2015 08:41:44 IST