The ailing SpiceJet may be close to the end of its troubles. A clutch of investors led by the airline’s co-founder Ajay Singh is likely to sign an agreement with Sun Group chairman Kalanithi Maran, who holds the controlling stake to buy out the latter’s shares. The airline told the aviation ministry that it would submit an investment plan to market regulator, the Securities and Exchange Board of India (Sebi), soon.
Sources said investors led by Singh, who helped set up the low-cost airline in 2005, and investment bank JP Morgan are likely to inject around $250 million ( Rs 1,550 crore) in the ailing airline that had been staring at a shutdown unless it got an investor on board.Senior airline executives met aviation ministry officials on Wednesday to inform them that the investment plan had been worked out and that the airline would scale up operations once it gets the money.
“They have informed us that the investment plan is ready and they will be submitting it to Sebi,” a ministry official said after the meeting.
Sources said prospective investors will also consult the market regulator regarding various regulations applicable to a listed company in case of fresh infusion of funds by entities other than existing promoters. Besides, they would also seek guidance on applicability of open offer and takeover code-related norms, as well as about classification of promoter and public shareholders in a listed company.
The prospective investors, who have already injected around $17 million into the airline to finance its day-to-day operations, might seek some relief from the market regulator, sources said.
Singh has been in talks with US-based private equity company Indigo Partners, private investment firm TPG Capital, and investment banks JPMorgan and Morgan Stanley as he leads efforts to stitch together an alliance to rescue the budget carrier.
Ajay Singh, as earlier reported by Hindustan Times, is likely to raise his personal stake in the airline to more than 26% from the current 4.5%. “The consortium partners are together likely to hold around 75% stake in the airline. They are likely to buy out the entire 53.48% stake of Maran,” an official said.
SpiceJet needs an immediate infusion of about Rs 2,000 crore to survive. Maran had bought a majority stake in SpiceJet from its promoter Bhupendra Kansagra and distressed-assets buyout specialist Wilbur L Ross in 2010. Singh had launched SpiceJet with the Kansagra family.