Spicejet Chairman Kalanithi Maran on Friday pledged an additional 43.9 million shares to raise Rs 200 crore to fund the airline's expansion.
In a filing to the Bombay Stock Exchange, Spicejet said Kal Airways, a company owned by Maran, has pledged over 43.9 million shares on July 13, taking the total number of shares pledged by the entity to over 134.8 million. The total pledged shares account for 86.17 per cent of its holding in the Delhi-based carrier and 33.27 per cent of the outstanding shares of the company. Kal Airways holds over 156.5 million shares in Spicejet.
Confirming the development Spice Jet CEO Neil Mills said: “The airline's chairman has pledged his shares to support short-term borrowings.”
The move comes at a time when Sun TV and the Marans are under scrutiny for financial irregularities. Mills said the airline has raised debt of Rs 200 crore from a local bank to fund its expansion. The airline plans to set up a base in Hyderabad and start a regional service using Bombardier Q400 planes. However, the airline is still to receive an approval from the Reserve Bank of India for $270 million to fund the aircraft order. The airline has also sought DGCA approval to launch flights to ten more international destinations.
Shares of Kalanithi Maran-promoted Spicejet has more than halved this year on the bourses. The scrip, which quoted at around Rs 80 in December 2010, is now trading at Rs 36.15 a share. Maran, with his firm Kal Airways, holds a 38.16 per cent stake in Spicejet. He took over as the company's chairman in November last year.
Spicejet's stock took a beating after Maran's brother Dayanidhi Maran was accused by the Central Bureau of Investigation of favouring a telecom company during his tenure as telecom minister between 2004 and 2007.
