Media tycoon Kalanithi Maran, his wife Kavery Kalanithi and S Natrajhen have resigned from SpiceJet’s board, bringing about a formal change of guard at the airline. The development comes after the Marans decided to dilute their majority holding in the airline, bought out by a clutch of investors led by former promoter Ajay Singh.
The transition in ownership was quick and by Friday afternoon the Maran-owned Sun Group’s logo was removed from the SpiceJet website. SpiceJet will switch to its older logo. Over the next few days the airline will also see new appointments in senior management positions.
ALSO READ: Marans exit SpiceJet, Ajay Singh checks in
As part of the agreement endorsed by the ministry of civil aviation, Singh and other investors will put in around Rs 1,400 crore in the company — two-thirds as equity and one-third in debt or hybrid instruments.
The transition in ownership was quick and by Friday afternoon the Maran-owned Sun Group’s logo was removed from the SpiceJet website. SpiceJet will switch to its older logo. Over the next few days the airline will also see new appointments in senior management positions.
ALSO READ: Marans exit SpiceJet, Ajay Singh checks in
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As part of the agreement endorsed by the ministry of civil aviation, Singh and other investors will put in around Rs 1,400 crore in the company — two-thirds as equity and one-third in debt or hybrid instruments.
The new investors have already put in Rs 100 crore and would infuse more money in tranches — Rs 400 crore by February 15 and a similar amount on March 15. The last tranche of Rs 500 crore will be put in by April 30, according to sources close to the investors. The cash will be enough for the airline to clear its dues (Rs 1,200-1,300 crore) with lessors, airport authorities and other vendors and start with a clean slate.
The airline board has given approval for the issuance of global depository receipts, American depository receipts or foreign currency convertible bonds to facilitate the fresh infusion.
In an announcement to the BSE on Friday, the airline said its board had taken on record the share sale and purchase agreement between the company, Kalanithi Maran, Kal Airways Pvt Ltd and Ajay Singh, pursuant to which the existing promoters have agreed to sell and transfer their entire 58.46 per cent stake to Ajay Singh.
At Friday's closing price, the promoter equity is valued at Rs 689 crore.
Maran will be issued 3.75 million non-convertible cumulative redeemable preference shares of Rs 1,000 each upon conversion of share warrants held by him.
Sources close to the investors add that the Marans would hold about 10 per cent equity capital upon expansion of the equity base of the company.
The SpiceJet stock rose 1.8 per cent and closed at Rs 22.20 on Friday.
Under the revival plan being finalised, SpiceJet will increase its fleet to 26 Boeings and 14 Bombardier planes in its summer schedule. Based on negotiations with lessors, it is looking to increase the total number of aircraft to 50 by the winter schedule. The company will also shift the registered office from Chennai, the Marans' headquarters, to Delhi, which is Ajay Singh's home.
The Board also gave not to create, issue, offer and allot equity shares/ warrants and/ or any instrument convertible into equity shares whether optionally or otherwise/ Global Depository Receipts (GDRs)/ American Depository Receipts (ADRs)/ Foreign Currency Convertible Bonds (FCCBs) (“Securities”) for an aggregate amount not exceeding Rs 1,500 crore or equivalent currency(ies) to any person or persons, whether or not shareholder of the company.