Ajay Singh-led group to invest $217 mn in SpiceJet

A consortium of investors led by SpiceJet co-founder Ajay Singh is likely to invest $217 million (Rs 1,378 crore) to pick a substantial stake in the embattled airline, sources told HT.

A consortium of investors led by SpiceJet co-founder Ajay Singh is likely to invest $217 million (Rs 1,378 crore) to pick a substantial stake in the embattled airline, sources told HT.

Potential investors have already injected about $17 million (Rs 108 crore) to help the airline run its day-to-day operations.

HT had first reported on August 8 that promoter Kalanithi Maran was in talks with Singh for buying out his stake in the airline.

Singh, sources said, is in talks with US-based private equity company Indigo Partners, private investment firm TPG Capital, investment banks JPMorgan and Morgan Stanley, as he leads efforts to stitch together an alliance to rescue the ailing low-cost carrier.

Singh, as reported by HT earlier, 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 the promoter, billionaire media tycoon Kalanithi Maran,” an airline official said.

“An airline such as SpiceJet, which has a substantial market share, huge brand value, an approved schedule and aircraft on order is a better buy than launching a new airline from scratch,” said Rajji Raji, chairman, Swift Travels.

Singh, who helped set up the low-cost airline in 2005, has sought two to three weeks time from the aviation ministry to finalise the investment. The funding discussions were taking longer than expected due to Christmas holidays. Investors are betting on low oil prices and a likely acceleration in economic growth to help their turnaround effort for the airline.

Maran had bought a majority stake in SpiceJet from its promoter Bhupendra Kansagra and distressed-assets buyout specialist Wilbur L Ross in 2010.