CCI clears SpiceJet-Ajay Singh deal; Rs 400 cr infusion next week
Paving the way for ownership change at SpiceJet, fair trade watchdog CCI on Thursday cleared original promoter Ajay Singh's purchase of controlling stake in the cash-strapped carrier and plans to invest Rs 400 crore next week.business Updated: Feb 20, 2015 01:26 IST
Paving the way for ownership change at SpiceJet, fair trade watchdog CCI on Thursday cleared original promoter Ajay Singh's purchase of controlling stake in the cash-strapped carrier and plans to invest Rs 400 crore next week.
Under the revival plan, SpiceJet would see a capital infusion of Rs 1,500 crore from Singh and outgoing promoters Marans would transfer their entire 58.46 per cent to him.
With clearance from the Competition Commission of India (CCI), the low-cost carrier's original promoter is closer to taking the management reins and ownership of SpiceJet.
Singh said he has received approval from CCI for the deal with SpiceJet.
He said Marans are expected to transfer their entire stake of over 58 per cent to him in the next two days.
"A tranche of Rs 400 crore will be infused into SpiceJet by next Monday or Tuesday," Singh told PTI.
As part of the revival plan, Singh said that he is to invest Rs 1,500 crore in the carrier and already Rs 100 crore has been pumped in.
Another Rs 500 crore would be infused by end of March, followed by an equal amount by April end, he said.
Singh is now awaiting nod from the Home Ministry for his appointment as director on the board of SpiceJet.
The deal has already been cleared by the Civil Aviation Ministry.
In late January, SpiceJet board had approved transfer of Maran family's entire 58.46 per cent existing stake to Singh, while the company would raise Rs 1,500 crore through issuance of fresh securities.
Besides, Marans would infuse Rs 375 crore into carrier in lieu of 'non convertible preference shares' to be alloted to them despite they offloading their entire existing equity stake in favour of Singh and resigning from the board of the airline.
On Wednesday, ministry sources had said SpiceJet was carrying out its day-to-day operations on the cash generated by the advanced bookings.
SpiceJet's net loss widened to Rs 275 crore in three months ended December 2014, mainly on account of lower passenger numbers and a one-time cost of Rs 295 crore.
The airline was forced to ground flights for some days during the December quarter after its vendors refused to offer credit. This resulted in the airline seeing a 31 per cent decline in capacity, while revenue fell 27 per cent to Rs 1,300 crore.
First Published: Feb 20, 2015 01:25 IST