Former SpiceJet director and co-founder Ajay Singh could emerge as the white knight for the ailing low-cost carrier that is on the verge of closure unless an investor bails it out.
HT had first reported on August 7 that Singh was in talks to buy out promoter Kalanithi Maran’s stake in the airline.
Singh has held meetings with senior aviation ministry officials over the last couple of days including aviation secretary V Somasundaram, sources said.
Sun Group, SpiceJet’s parent, said it cannot afford to bail out the airline. “We do not have the liquidity to invest large sums at this time, which is why we need bank financing for which the promoters are willing to provide a guarantee. We cannot do more,” SL Narayanan, chief financial officer of Sun Group told Reuters.Maran had bought 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, launched SpiceJet in 2005.
When Singh, who, sources said, still holds a very small stake in the airline, quit the board in August 2010, SpiceJet, with a cash chest of `800 crore, was a different story.
“Also SpiceJet has a huge brand value, aircraft and routes in place, an approved schedule, which is better than launching a new airline from scratch,” a source said.
“An investor can help save SpiceJet. With crude at record low, there could be no better time to run an airline,” said Subhash Goyal, chairman, STIC Travel Group.
Meanwhile, oil companies declined a request from the aviation ministry to extend a 15-day credit to SpiceJet.