SpiceJet promoter Ajay Singh considering partial stake sale; carrier's shares surge over 13% on BSE

New Delhi: SpiceJet promoter Ajay Singh is exploring the possibility of a partial stake sale in the airline company, as per media reports.

The airline company’s share rose over 13 per cent on the Bombay Stock Exchange (BSE) after the news. The stock is trading on the BSE at Rs 50.65 at 1:21 pm today.

Singh, who holds 60 per cent stake in SpiceJet, is in talks with a few Indian firms as well as a Middle Eastern airline on the matter of the partial stake sale. According to reports, the Middle Eastern company has expressed its desire to buy 24 per cent stake in the budget carrier and get a board seat in SpiceJet too.

News agency ANI reported a SpiceJet spokesperson saying, “the company continues to be in discussions with various investors to secure sustainable financing and will make appropriate disclosures in accordance with applicable regulations."

https://twitter.com/ANI/status/1554686350334754816

On Tuesday, the shares of SpiceJet rose over 5 per cent after it announced that it had reached an agreement with the Airports Authority of India (AAI) and cleared all outstanding principal dues of the airport operator.

The airline’s statement on the matter had said that after clearing its dues, “SpiceJet will no longer remain on ‘cash and carry’ at AAI-run airports across the country and will revert to advance payment mechanism for daily flight operations.”

In 2020, the budget carrier was placed by the AAI on a “cash and carry” basis as it was unable to pay its dues. Under this rule, SpiceJet had to make daily payments for a variety of fees related to navigation, landing, parking and other services to the AAI.

The budget carrier needs recapitalisation for continuing its operations. SpiceJet has faced losses for the past four years. The airline is yet to declare its results for the January-March 2022 quarter.

However, its ability to clear its outstanding dues as well as the AAI’s decision to release SpiceJet’s Rs 50 crore bank guarantee has brought in some good news for the business community.

The airlines has recently been in the news for a number of technical malfunctions. The  Directorate General of Civil Aviation (DGCA) had recently ordered SpiceJet to operate a maximum of 50 percent of its flights, approved for the summer schedule, for eight weeks.

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