The aviation ministry has granted its initial approval to the revival plan of cash-strapped SpiceJet, submitted by its new investors led by the airline’s co-founder Ajay Singh. The ministry has now referred the plan to the market regulator Securities and Exchange Board of India (Sebi).
The new investors are set to buy out Kalanithi Maran’s entire stake of just over 58% in the airline. Sebi will take a final call on whether the new promoters will need to make an open offer to the minority shareholders. An open offer is triggered when a stake of 25% or more is acquired in a company.
The aviation ministry has decided to issue directions to the Directorate General of Civil Aviation (DGCA) to lift the restrictions imposed on the airline on advance ticket bookings beyond March, as reported by HT on January 20.
However, as SpiceJet awaits approvals from the regulatory authorities, lessors who have leased aircraft to the airline are developing cold feet. “Lessors of 11 Boeing 737s leased to SpiceJet have met the DGCA. They want their planes back,” said a ministry spokesperson. The airline at present operating 17 B737s.
The airline plans to ramp up its Boeing fleet to 26 planes, according to the plan submitted to the ministry.
SpiceJet’s share fell by 8.26% to close at Rs 21.10 on the Bombay Stock Exchange on Wednesday.
“SpiceJet should stabilise under the new investors and operate as a lean airline with focus on a limited number of routes. The airline will only grow stronger from the position it is in now,” said aviation expert Rajji Rai.
On January 15, SpiceJet informed the BSE that its principal shareholder and promoter Maran and KAL Airways Pvt Ltd will transfer the ownership, management and control of the company to Singh, who had helped set up the airline in 2005 and had sold his stake in 2010.