The budget airline is confident of getting aircraft lessors to table for negotiation
With the original owner Ajay Singh now firmly in the pilot's seat, budget airline SpiceJet Ltd may well have a chance of flying away from a Kingfisher Airline kind of crash.
Speaking to DNA, the airline's chief financial officer (CFO) Kiran Koteshwar, said the airline has begun paying staff salaries and service taxes on time.
"We are current on salary and service tax payments, and have started making payments to all our suppliers on time. There is still a lot to be done but all indicators are good with our load factor at around 80% and on time performance (OTP) of 90% in the current month," he said.
The Mallya-owned airline, which was hit by crisis in 2012, defaulted on its payment of employee salaries and taxes. Its bankers and creditors are still trying to recover their debts and dues without much success.
The finance chief of SpiceJet said the situation was slowly improving with the airline meeting its commitment given to airports and oil companies.
"We are paying oil companies on time and airports are being paid on a daily basis. As and when cash comes in, we will clear all dues of our creditors," he said.
Koteshwar said the change of ownership of the airline will now boost the confidence of the investors, customers and suppliers.
On Monday, Singh finally became the owner of SpiceJet again after completing the process of share transfer from the former promoter Kalanithi Maran, chairman of the Sun group, to him.
"With the physical transfer of shares to his (Singh's) account, and clearance from the CCI (competition commission of India) and Sebi (stock exchange regulator), he is now officially the owner of SpiceJet," said a reliable source, who spoke on condition of anonymity.
A deal for share sale and purchase was inked between Maran, his company Kal Airways and Singh last month. With this, Singh now owns 58.46% stake in the Gurgaon-based airline and can now begin scouting for investors for recapitalisation of cash-starved SpiceJet.
Singh, in his revival plan submitted to the government, has committed to bring in Rs 1,500 crore by April-end. Koteshwar said the investors will now start their due diligence now.
Another source, who did not want to be named, said the airline was confident of getting the aircraft lessors, including the one that has approached the court for repossession of aircraft, "to the table for negotiation".
"We are talking to them on a daily basis. Ajay Singh will formally talk to them now. They (lessors) have taken a legal recourse but we are confident we will be able to bring them to the table for discussion and try to settle the matter in due course of time," he said.
India acceded to the Cape Town Convention, which defines the rights of aircraft owners or lessors in case of a default on payments, allowing them to get their equipment back quickly in case of dispute.
Interestingly, according to a source, Singh will not have to make an open offer, as is mandated by Sebi in the case of an entity buying minimum 25% stake in a company, as the change of control of ownership has been approved by a "competent authority", which is ministry of civil aviation.
"The ministry has approved the scheme (change of control) so the open offer by Singh is not required," he said.
The airline had earlier said that the share transfer was pursuant to a "scheme of reconstruction and revival for the takeover of ownership, management and control of SpiceJet Limited to be filed before the competent authority, the ministry of civil aviation".
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