SpiceJet finally received a new lease of life after billionaire media tycoon Kalanithi Maran and Ajay Singh finally sealed a deal that would see the latter return back to the helm of affairs at the Gurgaon-based low-cost carrier.
The airline announced on Thursday 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.
“I think this is a very tough job (reviving SpiceJet) but it’s worth doing,” Singh told HT. “I will do my best and put all my energy behind it and try and make sure that the airline doesn’t go down.”
The Singh-led consortium will hold over 51% stake in the airline.
While financial details of the deal were not disclosed by either side, sources said the Singh-led consortium could pump in `1,500-2,000 crore into the airline. Maran owns about 58% in the airline.
SpiceJet meanwhile was put on cash-and-carry (making daily payments to operate flights) by the Airport Authority of India on Thursday. It was briefly grounded last month as suppliers refused to refuel planes due to unpaid bills.
It had drastically cut down operations and fleet and cancelled over 2,000 flights since December last year as Maran’s Sun Group made it clear it would not put up any more money into the airline.
Since Maran had subscribed to certain warrants which will be convertible into shares in 2016, the family will continue as normal public shareholders without any management control.
Some key management changes are, however, likely to take place in the airline, which has started disbursing December salaries of its employees. SpiceJet is also expected to renegotiate some of the contracts, including those related to aircraft leases.
The airline informed the BSE that its Board of Directors had taken on record Maran’s proposal to transfer his stake to Singh pursuant to a “scheme of reconstruction and revival for the takeover of ownership, management and control of SpiceJet”.