Kalanithi Maran likely to become SpiceJet chairman tomorrow

Media baron Kalanithi Maran is likely to take over as chairman of SpiceJet tomorrow, following his acquisition of majority shares in the low-cost carrier, and may go over for overhaul of the airline's board.

"An announcement to this effect is expected to be made in the board meeting slated to be held on Monday," an industry source said, adding that an "overhaul" of the airline board is also on the cards.

Maran, a Chennai-based industrialist and SunTV chief, had clinched a deal to acquire a 37.7 per cent stake in the no-frills carrier in June for Rs 750 crore from American investor Wilbur Ross, his investment companies and the Kansagara family-promoted Royal Holding Services Ltd.

As part of the revamp exercise, Maran has already appointed Neil Mills as CEO of the airline and is expected to induct some of his trusted lieutenants from SunTV into the board.

Besides Maran, the Civil Aviation Ministry has already approved the induction of Kavery Kalanithi Maran, M K Harinarayanan, J Ravindran, S Sridharan and Nicholas Martin Paul into the company board.

Industry sources added that Kishore Gupta, one of the present directors on company board, may leave the airline.

Several top officials, including the then CEO Sanjay Aggarwal and founder director Ajay Singh, have already left the organisation, giving a free hand to the new stakeholder to revamp the management.

However, Bhulo Kansagra, who is among the founder directors of the low-cost carrier, will continue to be the board member.

As per a filing to the Bombay Stock Exchange by the airline, response of the open offer made by Maran will also be taken up in the board meeting on Monday.

The SunTV chief and his private firm KAL Airways currently holds 38.66 per cent stake in the airline and through the open offer, they had offered to pick up additional 20 per cent stake. The open offer closed on November 6.

Through the open offer, the shareholders were offered Rs 57.76 for every share they hold in SpiceJet, translating into a 3 per cent premium over the closing price of Rs 56.05 on June 11, 2010 (a day before the deal was announced).

However, it was about 50 per cent below the current price of the airline shares, which closed at Rs 86.65 apiece on the Bombay Stock Exchange on Friday.

As per market regulator Sebi's takeover norms, an open offer is compulsory if the stake of the acquirer crosses the threshold limit of 15 per cent.