New Delhi: Shares of SpiceJet surged 15.91 per cent on Friday, after media reports suggested that former promoter Ajay Singh and two 'blue-chip' investors are said to be pumping in about Rs 1,200 crore to rescue the financially strapped airline.
At 12:26 pm, SpiceJet was trading 15.91 per cent higher at Rs 15.30. It hit a low of Rs 14.40 and a high of Rs 15.25 in trade today.
Reports said that Singh, who helped start the airline in 2005, met Civil Aviation Minister Ashok Gajapathi Raju and Civil Aviation Secretary V Somasundaran. "They (SpiceJet) have told the Ministry that they are likely to get an investor. The airline does not have a safety issue (but) it is going through financial stress. They are trying to address their financial woes," Raju said after the meeting late this evening. He said Singh shared some "thoughts" about the no-frill carrier's recapitalisation plans though these were not concrete plans as yet.
The minister, however, declined to go into specifics of whether a domestic or international investor would infuse funds into the cash-strapped airline. He confirmed that the airline had sought "rescheduling" of its dues to various vendors and service providers, including airports and oil marketing companies.
Though Singh did not speak to reporters, sources said he had held discussions with SpiceJet officials before he met the Minister and the Secretary. Earlier, S L Narayanan, CFO of SpiceJet's parent company Sun Group, said, "We need some breathing time... If we get a reprieve from the banks, Mr (Kalanithi) Maran is ready to give guarantee we can restart the engine. Once the collection starts coming in, we will pay (the dues)." Maran has already invested around Rs 820 crore in the last three years and he has invested whenever the airline has needed money, he had said.
Singh and London-based NRI Bhupendra Kansagra started SpiceJet in 2005. It had cash reserves of Rs 800 crore when they left the company five years later.
SpiceJet had reported a debt of Rs 1,506 crore at the end of the September 2014 quarter. In addition, reports suggest that the airline also owes close to Rs 1,600 crore to various entities, including the Airports Authority of India (AAI), spare part and maintenance vendors, and the income tax authorities.
