SpiceJet revival plan: Ownership change likely as Ajay Singh, PE funds may pump in $250 mn

Even as potential investors including co-founder Ajay Singh and private equity funds have begun discussions with markets regulator Sebi over their $250 million investment plan in SpiceJet, there are indications that ownership of the cash-strapped airline might change. This has been revealed to Firstpost’s Sindhu Bhattacharya by sources who are in know of the development. [caption id=“attachment_2018185” align=“alignleft” width=“380”] In financial crisis. AFP[/caption] According to PTI, investors are consulting Sebi with regard to various regulations applicable to in case of fresh infusion of funds by entities other than existing promoters and about the change in ownership and management. Besides, the investors are also seeking regulatory guidance about applicability of open offer and takeover code related norms, as well as about classification of promoter and public shareholders in a listed company, sources told the news agency. The moves assumes significance in the wake of another Indian carrier Jet Airways having faced major regulatory hurdles with Sebi last year over its induction of UAE-based Etihad as a strategic partner with a 24 percent stake. While the Jet-Etihad deal was eventually cleared, the case became a regulatory benchmark with regard to applicability of open offer and takeover rules. Etihad was allowed to be classified as a public shareholder in the company despite having a 24 percent “strategic” stake that they have purchased from the original promoters – Naresh Goyal and his family (who now own 51 percent). It is being anticipated that the investment plan for SpiceJet could involve complete exit of Kalanithi Maran-led group as promoters of the airline, if not immediately then over a period of time, sources said. Meanwhile, Maran’s exit may be complicated by reports stating that Maran may have diverted Rs875 cr of SpiceJet’s funds in Sun Group companies. SpiceJet in a BSE statement asserted that the company run in a professional manner and arrangements with Sun Group are only a “natural progression”. “The company operates independently and on its own in a very professional manner and any possibility of extending or receiving any special treatment in terms of commercial terms for any of the group companies is completely misconceived. “Execution/extension of any arrangement is a commercial decision based on arm’s length and has no other bearing to the same,” SpiceJet said Promoters hold 53.48 percent stake in BSE-listed SpiceJet while major ‘public’ shareholders include Tata group firm Ewart Investments (1.79 percent) and Kalpana Singh (1.41 percent). Retail investors hold 45.69 percent in the company that has a total market value of Rs 1,000 crore. With inputs from PTI