Low cost carrier SpiceJet is said to be in active discussion with a Middle Eastern carrier for a possible stake sale.
SpiceJet promoter Ajay Singh holds a stake of around 60% in the budget carrier. Sources said a big Middle Eastern airline has expressed interest to pick a 24% stake and a board seat in SpiceJet. A big Indian business conglomerate has also approached Singh for a stake in the airline.
Singh started the airline in 2004-05, tying up with NRI Bhulo Kansagra who had bought erstwhile Modiluft — that flew from 1993 and 1996 — from industrialist SK Modi in 1999-2000.
Reacting to the development, a SpiceJet Spokesperson said, “The company continues to be in discussions with various investors to secure sustainable financing and will make appropriate disclosures by applicable regulations.”
Earlier, on Tuesday, August 2, SpiceJet said that it entered into a full and final settlement with the Airports Authority of India (AAI) and has cleared all outstanding principal dues of the airport operator.
With this, SpiceJet will no longer remain on ‘cash and carry’ at AAI-run airports across the country and will revert to advance payment mechanisms for daily flight operations. SpiceJet’s ability to clear the pending dues reflects the airline’s improved cash flow in recent times.
SpiceJet’s domestic network covers the length and breadth of the country with the airline operating to 51 domestic destinations. Pioneer of the regional connectivity scheme, SpiceJet is the country’s largest regional player helping connect the remotest parts of the country by air.
The airline’s focus on providing direct flight connectivity to regional hubs not only ensures better connectivity but also has a cascading effect on tourism and economic activity in the region.
SpiceJet has added multiple UDAN destinations to the country’s aviation map including Pakyong, Jharsuguda, Kandla, Darbhanga, Kanpur, and Ajmer (Kishangarh), among others.
The airline has been under the spotlight after a slew of incidents of technical snags on its flights, and one of its Dubai-based lessors asked the regulator to deregister three of SpiceJet’s planes.
The airline is yet to release its Q4FY22 results, as the numbers are being re-authenticated due to a ransomware attack that impacted its IT systems.
Jump in shares of SpiceJet
Shares of SpiceJet climbed nearly 7% in Wednesday’s (August 3) trade after it was reported that the airline is in talks with a Middle Eastern carrier for a 24% stake sale. The scrip rose 6.65% to hit a high of INR 47.35 on BSE.
The SpiceJet stock rallied 5% on Tuesday, August 2, too, after it announced it had agreed with the Airports Authority of India (AAI) and cleared all outstanding principal dues of the airport operator.