SpiceJet promoter Ajay SinghImage credit source: PTI
Ajay Singh, the promoter of SpiceJet, the country’s leading airline offering cheap flight services, may soon sell his major stake in the company. The reason is that the company has been facing a shortage of funds for some time. The money generated from the sale of these shares will be used to resolve the crisis of the company.
The heavy debt burden has made SpiceJet’s situation such that it cannot even pay the fare for its planes. Meanwhile, Tata Group’s huge investment in the airline business and the expansion of IndiGo have increased the difficulties for SpiceJet in the market. Not only this, legal issues have also weakened the company’s position.
Ajay Singh can sell shares up to 15%
SpiceJet promoter and chairman Ajay Singh said that during this fundraising effort, the airline could sell more than 10 per cent of its stake. According to the agency, Ajay Singh can complete this share sale deal by the end of September. The company has been trying to raise money for a long time. After the arrival of this money, the company will be helped in meeting its various obligations. A source with knowledge of the matter even claims that if all circumstances remain favourable, Ajay Singh could sell up to 15 per cent of the airline’s shares.
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2000 crore will come from QIP
The company has already planned to raise Rs 2,000 crore through QIP (raising money from qualified institutional investors). This will also remove its fund shortage. The airline is in talks with potential investors. It has held several meetings with many investors in India and abroad to raise funds. Though SpiceJet has not made any official comment on this entire incident, still the company may complete this fundraising work by September.
SpiceJet says it plans to raise a total of Rs 3,200 crore from QIP, guarantees and equity investment by the promoter group. This fund will be used for revival of the idle fleet of aircraft, settlement of debt obligations and induction of new fleet of aircraft as well as for general corporate purposes.
SpiceJet’s fleet is so large
According to data available on BSE, the promoter group of the company held a little over 47 per cent of the shares in the airline as at the end of June 2024. SpiceJet had a fleet of 74 aircraft in 2019. The company currently operates around 20 aircraft.
