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Co-founder Ajay Singh heads SpiceJet rescue op

business Updated: Dec 19, 2014 02:20 IST
SpiceJet crisis

A clutch of investors lead by former director and co-founder Ajay Singh is set to pick up a significant stake in the embattled SpiceJet, leading to an immediate capital infusion of Rs 1200-1500 crore in the budget carrier that is staring at a shut down.

The new investors, which include international private equity players but no foreign airlines, are likely to buy out the entire 53.48% stake of the promoter, billionaire media tycoon Kalanithi Maran, a source, who did not wish to be identified, told HT.

In the new deal, Singh, who currently hold a stake of around 4.5% in the airline, is likely to raise his personal stake to more than 26%. Singh is currently finalising the contours of the investment with the international PE firms.

HT had first reported on August 8 that Maran, the billionaire media tycoon, was in talks with Singh for buying out his stake in the airline.

“This airline is eminently revivable,” a source close to the potential investors told HT on Thursday.

Singh refused to comment on the plans.

The capital inflow, however, could take longer than a month with the investors insisting on a thorough due diligence before committing the funds.

Singh, who has held several meetings with top aviation ministry officials this week, met aviation minister Ashok Gajapathi Raju on Thursday and made a detailed presentation on the timelines of capital infusion and a revival roadmap.

“Singh is interested in investing in SpiceJet. He conveyed this to the minister today,” said a source. “He, along with a set of investors, should submit a plan to revive the airline by next week,” the source said.

SpiceJet needs an immediate infusion of about Rs 2000 crore to survive. Maran had bought a majority stake in SpiceJet from its promoter Bhupendra (Bhulo) Kansagra and distressed-assets buyout specialist Wilbur L. Ross in 2010. Singh, along with the

Kansagra family had launched SpiceJet in 2005.