NEW DELHI: Mumbai-based business couple Harihara Mahapatra and Preeti Mahapatra will together acquire a 19% stake in SpiceJet for Rs 1,100 crore in the cash-starved airline. The funding by the Mahapatras comes soon after SpiceJet reached out to its shareholders to vote on a proposal to raise Rs 2,254 crore through the issue of up to 130 million convertible warrants and 320.8 million fresh equity shares at an issue price of Rs 50 each to more than 60 investors.
The funding will mainly be used to meet various debt obligations, increase its operational fleet size, clearing jet fuel payments, among other things. The funding comes at a time when SpiceJet has shown interest in acquiring the grounded and bankrupt Go First airline.
“The Board of Directors of the Company, recently approved a strategic move to raise fresh capital, totalling over Rs 2,240 crore (about $270 million). This initiative involves the issuance of equity shares to Financial Institutions, FIIs, HNIs, and private investors, aiming to fortify our airline’s financial strength and accelerate our growth trajectory,” said Ajay Singh Chairman & Managing Director of SpiceJet in the company’s annual report filed on Wednesday.
Singh said `200 crore has been infused in the airline and that they will be infusing another Rs 300 crore. With this equity contribution, SpiceJet is entitled to additional credit facilities of Rs 200 crore under the emergency credit line guarantee scheme. As per a company filing, Preeti will be issued 20 crore shares worth Rs 1,000 crore and will hold a 17.66% stake in SpiceJet, following the allotment of shares and warrants. Hariahara will be issued 2 crore shares against an investment of Rs 100 crore for a 1.775 stake. Elara Capital and Aries Opportunities will be other prominent stakeholders. Post the transaction, promoter Singh’s shareholding in the airline will come down from 56.49% to 38.55%.
Harihara Mahapatra is the co-founder of Mahapatra Universal Limited. While not much is known about the group, its website notes that it has a presence in multiple sectors, such as real estate, infrastructure, consulting, consumer, and retail.