Hectic Parleys On as SpiceJet Awaits Investment

As per a capital infusion plan received by the Civil Aviation Ministry, the initial funds may come in by as early as on Saturday.

Published: 10th January 2015 01:13 AM  |   Last Updated: 10th January 2015 01:16 AM   |  A+A-


NEW DELHI: As SpiceJet awaits the much-needed fund infusion to tide over its financial crunch, there was intense speculation on Friday night that its senior executives and potential investors met top government officials to discuss the future of the carrier.

The talks gained further currency in the wake of SpiceJet shares soaring by a huge 10 per cent in the stock market, after getting a huge battering in the recent past.

While officials in the ministry as also in the airline remained tight-lipped about any meetings, the market was abuzz with talks about discussions held by SpiceJet's original co- founder Ajay Singh with the Civil Aviation Ministry's top officials.

Besides, there was also a speculation that SpiceJet's Chief Operating Officer Sanjiv Kapoor met top Ministry officials.

When contacted, the officials in the Ministry as well as in the airline refused to comment on any such meetings.

The hectic parleys come at a time when the airline is likely to get the first round of its much-needed capital, as part of an estimated USD 200 million investment plan.

As per a capital infusion plan received by the Civil Aviation Ministry, the initial funds from an overall corpus of about USD 200 million may come in by as early as on Saturday, sources had said earlier.

"In about a month, more funds would come in," they added.

Another official said the Ministry has received a proposal and the government is hopeful about the carrier's turnaround.

The airline, which is now operating about 200 flights a day, is also believed to have renewed its bank guarantee to Airports Authority of India (AAI).

Sources said the indications are positive so far and the  government does not want one more airline to shut down as that would send wrong signals to the economy and the sector in particular.

Shares of SpiceJet today rose sharply by 10 per cent, after a gain of about 3 per cent on the BSE yesterday.

The cash-strapped budget carrier had presented a revival plan to the Civil Aviation Ministry late last month, but it was told to submit a revised comprehensive plan with more details.

SpiceJet's founding promoter Ajay Singh has also come to the rescue of the crisis-ridden airline, with Singh and a US-based investment fund planning to invest in the carrier.

The potential investors are likely to buy stake from current promoter Kalanithi Maran by infusing USD 200 million to help the airline to stay afloat.

With the airline grounded for almost one full-day last December due to the oil companies' refusal to supply it jet fuel without cash, Civil Aviation Ministry had come to its rescue with requests to oil marketing firms and the AAI to extend the credit line to the airline for two weeks till December 31, 2014.

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