SpiceJet deadlock continues

News that CBI will question Maran in Aircel-Maxis deal became roadblock for carrier wanting initially to raise Rs 1,200 cr

Negotiations to bail out SpiceJet took a new turn when former promoter Ajay Singh, who has a revival plan, met the the cash-strapped airline’s brass on Monday, according to sources. S L Narayanan, the Sun Group’s chief financial officer, did not respond to calls and text messages. Singh declined to comment on his meeting.

The talks are centered around promoter Kalanithi Maran and Kal Airways, also owned by him, infusing part of the Rs 1,100 crore needed to get SpiceJet back into shape. The Sun Group, which Maran heads, has made it clear it does not want to put in any more money into the airline.

Singh and two US-based private equity funds are interested in bailing out SpiceJet. The airline’s liabilities and dues are around Rs 2,000 crore.

According to sectoral sources, SpiceJet was planning to raise around Rs 1,200 crore from an investor last month, but the deal fell through after reports of the Central Bureau of Investigation questioning Maran in connection with the Aircel-Maxis telecom deal. In 2010, when Maran acquired SpiceJet for around Rs 750 crore, the airline had cash reserves of over Rs 450 crore. In March 2014, SpiceJet announced it had allotted 6,41,69,000 warrants, having an option to apply for equivalent equity shares at a price of Rs 20.76 a share. The funds to be infused, including premium, would be Rs 133.22 crore. With this additional funding, the promoters’ holding would increase from the 53.48 per cent to 58.46 per cent after the allotment of the new shares, the company said.