)
The civil aviation ministry has approved the takeover of SpiceJet by Ajay Singh, the airline’s founder and former director. Now, Singh can approach the Securities and Exchange Board of India to seek exemption from making an open offer to the airline’s public shareholders.
Singh, along with a group of investors, plans to infuse Rs 1,500 crore into the airline in three tranches. He will assume ownership of the carrier from Sun TV Chairman Kalanithi Maran, who owns 58 per cent in SpiceJet.
According to norms, an investor or company can seek exemption from making an open offer under certain conditions. Such a proposal has to be approved by a court or a competent authority.
On Friday, the airline notified the BSE it had received the approval of the competent authority (the Ministry of Civil Aviation) for the “scheme of reconstruction and revival for the takeover of ownership, management and control of the airline by Ajay Singh”.
SpiceJet, which has liabilities of Rs 1,400 crore and is making daily payments to airports and fuel companies, plans to operate a daily schedule of 280 flights during the summer, against its current schedule of 230 and its peak schedule of 340 flights in July last year. The airline has cut its fleet to 34 (19 Boeing B737 and 15 Q400s) from 50 in mid-2014.
TO-DO LIST
Challenges facing SpiceJet
- Paying Rs 1,400 crore of dues
- Reconsidering its discounting policy
- Reducing operating losses
- Infusing funds for growth capital
- Reviewing the two-fleet configuration and stations in small cities that have increased overall costs
- Dealing with staff retrenchment
