SpiceJet promoter Ajay Singh is now in talks with multiple players - including a Middle Eastern carrier and a big Indian conglomerate - for stake sale to raise funds for the struggling-to-survive budget airline, which urgently requires re-capitalisation to keep flying. The airline management had been telling concerned government officials about its poor financial health and these talks, and has now confirmed the same.
A SpiceJet spokesperson said, “The company continues to be in discussions with various investors to secure sustainable financing and will make appropriate disclosures in accordance with applicable regulations.” Singh has about 60% stake in the budget carrier. Airlines sources claim Singh is “in active discussion with a Middle Eastern carrier for a possible stake sale, which has expressed interest to pick 24% stake and a board seat in SpiceJet. A big Indian business conglomerate has also approached Singh for a stake in the airline. ”
Emirates said it “has no plans to acquire a stake in any airline in India or elsewhere. ” Being a mega airport player, Adani Group can’t buy stake in an airline as cross-holdings are not allowed. For this reason, the Tata Group did not buy a stake in GMR Airports as it has mega airline plans.
The DGCA has allowed SpiceJet to operate half of its approved schedule of flights this summer. An increase in operations will be allowed only if it can prove to the regulator that it has “sufficient, technical support and financial resources to safely and efficiently undertake such enhanced capacity. ” This will require capital infusion.
It has changed hands several times during its existence. Most recently, Singh reacquired the airline from Kalanithi Maran in 2015 when it was on the verge of shutting down. The airline staged a recovery under Singh in the first few years.