In talks with more than one investor for revival of Spicejet: Ajay Singh

Cash-strapped SpiceJet today returned to original promoter Ajay Singh for its revival as the current owners, the Maran family and KAL Airways have agreed to transfer control of its entire 53 percent equity stake worth about Rs 500 crore. [caption id=“attachment_2020617” align=“alignleft” width=“380”] AFP[/caption]Speaking to CNBC-TV18, Ajay Singh said, that a plan to revive the beleaguered airline was submitted to the Aviation Ministry. “Civil Aviation ministry has been provided a plan for revival of SpiceJet. The environment is very supportive, everyone is doing all they can to see that SpiceJet does not fail,” said Singh. Timing for entry in SpiceJet is very good and its current valuations are low, said Singh. “Low oil prices, rupee appreciation, supportive government will help aviation sector. Only 3 percent of Indians fly today, we expect a significant rise in this number which would improve revenue and provide shareholders with great returns,” Singh said. When asked about the investors, the carrier’s former promoter confirmed that talks with were on-going and there would be more than one investor (domestic or international) in the airline, but due to disclosure agreements he could not name them. Singh also expects foreign shareholding in the airline to be between 25-49 percent after the deal has been finalised. On fund infusion, Singh said that neither he nor the investors has pumped any money in the airline but it was the existing partners and vendors that did so. He added, that once the transaction is complete the investors would infuse significant amount of money in the carrier to reduce liabilities. However, the long-term liabilities would be cleared at the current juncture. Speaking about regulators and the necessary approvals for taking over, Singh said the necessary regulatory approvals would be sought when the investment plan is finalised and approaching Sebi for open offer exemption would depend on legal advice. But he added that the investors would make an open offer if regulations require it. Talking about the revival plan, Singh said, “SpiceJet needs to make economic sense, there will be additions to the existing fleet in a short-span. SpiceJet will go back to the basics and revert to a low-cost model.”