Cash-strapped SpiceJet's original promoter Ajay Singh returned to the airline on Thursday with a long- term plan entailing an investment of up to Rs 1,500 crore, as Maran family agreed to cede control with transfer of over 53% stake in the carrier.
Cash-strapped SpiceJet's original promoter Ajay Singh returned to the airline on Thursday with a long- term plan entailing an investment of up to Rs 1,500 crore, as Maran family agreed to cede control with transfer of over 53% stake in the carrier.
Singh, who is in talks to rope in more investors including foreign entities, would get 53.48 per cent stake, currently worth about Rs 500 crore, in the airline from the Maran family as part of the deal approved by the SpiceJet board on Thursday. "The airline has given a revival and restructuring plan to the Civil Aviation Ministry for change in control, which has to be cleared by it. Once they do it, we will execute the revival plan," Singh told PTI on Thursday.
An open offer for purchase of further 26% from public shareholders (worth about Rs 250 crore) will be made if asked by the market regulator Sebi. Kalanithi Maran-led Sun Group would also infuse Rs 80 crore in the loss-making airline following conversion of their warrants, which would give them a 10% minority stake. Marans would remain invested with this stake in the airline, which they acquired over four years ago, as a public shareholder although they would cease to be its promoters.
"The revival plan would include financing and operational efficiency," Singh said. When asked whether there would be retrenching of employees, he replied in the affirmative. "Downsizing has to be done... We will try to keep it at minimum," Singh said.
SpiceJet Chief Operating Officer Sanjiv Kapoor said he is looking forward to the carrier getting back to normalcy while some more steps may be taken for its revival.
"The ownership change in SpiceJet is a positive development. (We are) looking forward to get back to normalcy," Kapoor said. The fresh lease of life marks the third change in ownership for the airline, which was founded in 2005 by Singh along with London-based Kansagra family of Indian origin.
US-based investor Wilbur Ross, known as a turnaround specialist, held a substantial stake for a brief period before selling it to Marans in 2010. While the company did not disclose the financial details of the deal and revival plan, official sources said that the overall deal could be worth Rs 1,500 crore in three tranches.
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