 "SpiceJet promoters to infuse Rs 133 cr")
This will be the fifth occasion since 2011 when the promoters are infusing money in the airline. The company made a formal filing to this effect on Friday, to the BSE exchange. The board of directors approved a proposal on Thursday to issue up to 64.17 million warrants to the promoters. These would have the option to apply for and be allotted an equivalent number of equity shares of the face value of Rs 10 each, on a preferential basis on a price to be determined later, by Securities and Exchange Board of India regulations.
The company also informed BSE its board of directors had decided on a postal ballot of shareholders for permission to allot the warrants and to empower it to borrow in excess of the paid-up capital and free reserves.
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The shares closed on Friday at Rs 18.60 each, down 2.1 per cent, on the BSE.
S L Narayanan, chief financial officer for the Sun group of companies, owned by Maran, told Business Standard with the latest additional funding, the promoters’ holding would rise to 58.46 per cent of the expanded capital, after allotment of the new shares.
As of December, the promoters were holding 53.48 per cent, of which Maran was holding 24.24 per cent. The other 29.24 per cent was held by KAL Airways Private Ltd, promoted by the Maran family.
In December 2013, SpiceJet had allotted 15 million equity shares, consequent upon conversion of an equal number of warrants to Maran, who infused Rs 54.3 crore. Maran converted the warrants, allotted on January 9, 2013, into equity shares. Narayanan then said the proceeds were to be utilised towards working capital requirements of the company, in accordance with the terms of the issue.
Earlier, the promoters in 2011-12, 2012-13 and 2013-14 infused equity capital to the tune of Rs 130.9 crore, Rs 99.4 crore and Rs 130 crore, respectively.
According to observers, the latest measure is aimed at raising resources to stall the erosion of the net worth.
Hurt by a depreciating rupee, higher maintenance costs and subdued demand, SpiceJet had a record loss of Rs 559 crore in the three months ending September 2013. It had Rs 164 crore in loss in the corresponding period last year. The approximate impact of the currency depreciation was Rs 72 crore and aircraft maintenance cost was higher than expected at Rs 78 crore, it said. Revenue in the period declined 26 per cent to Rs 1,257 crore, from Rs 1,702 crore in April-June.
The airline has been in talks with private equity funds for an investment for some time but hasn’t met with a success. Sanjiv Kapoor, the chief operating officer, said last month the airline was talking to more than two partners, interested in an equity stake.