Sources close to the deal who did not want to be named, said Marans are relieved that they have washed their hands off SpiceJet's liabilities that are estimated to be close to Rs 2,000 crore.
Principal shareholder and promoter Kalanithi Maran and KAL Airways Private of the troubled budget carrier SpiceJet have given away their stake of 53.48% to former co-founder of the airline Ajay Singh for a song.
But it is not a bad deal for the Marans. On contrary, sources close to the deal who did not want to be named, said Marans are relieved that they have washed their hands off SpiceJet's liabilities that are estimated to be close to Rs 2,000 crore.
"There was no equity value left in the airline's stock. It is completely eroded. Ajay Singh has negotiated the deal well," said the source.
According to him, Kalanithi Maran, who is currently being probed by the CBI, must be just happy to be let off the hook regarding his liabilities in the airline and huge debts, which could have led to confiscation of his personal wealth by the banks.
For Maran, it would not have made sense to continue with airline as state of SpiceJet is such today that outflow of cash is more than inflow of cash.
"If he (Maran) would have put Rs 1,000 crore in the airline on liabilities of around Rs 2,000 crore, it would have only added on to it. There are huge network losses and pending dues of vendors and suppliers," he said.
For Singh too, the deal is a big win. He gets an established airline with a strong brand with over 30 aircraft and all Directorate General of Civil Aviation (DGCA) approvals in place for taking over the liabilities of Rs 2,000 crore of the airline.
"He (Singh) gets a running airline. Tata's joint ventures with AirAsia and Singapore Airlines will take years before they reach the established stature of SpiceJet," said the source.
What has buoyed Singh is bright prospects of airline industry with crude dipping to levels before $50 per barrel and the government's will to push reforms in the sector.
Singh's closeness to the BJP government is also making the deal sweet for him. His entry as a white knight investor in mid-December swiftly changed the situation of the airline. There were instructions from the Prime Minister's Office to state-owned firms Airports Authority of India and the oil marketing companies to give relief to SpiceJet. Many believe the government was instrumental in making the airline ownership transfer from Maran to Singh possible.
"If the DGCA had acted tough against SpiceJet, it would have been shut by now," said the source.
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