SpiceJet’s Ajay Singh might sell stake to raise funds for airline
Sep 9, 2024, 09:44 IST
SpiceJet's Chairman, Ajay Singh, is considering selling over 10 percent of his stake in the airline as part of a crucial funding effort set to conclude by the end of September, a PTI report says. The budget airline is facing significant hurdles, including financial troubles, legal issues, and grounded aircraft, and is in urgent need of capital to meet its obligations.
A source told PTI that Singh may sell as much as 15 percent of his stake, depending on market conditions. Another source told the news aggregator that Singh, who serves as both Chairman and Managing Director, will likely sell around 10 percent of his shares, though the amount could increase if necessary.
SpiceJet is currently in talks with investors, both in India and abroad, for a Qualified Institutional Placement (QIP), with commitments already made for up to Rs 2,000 crore. These funds are expected to help the airline cover operational expenses and address its various liabilities.
While no official statement has been made by SpiceJet, insiders expect the funding round to be wrapped up by the end of September.
As of June 2024, Ajay Singh and the promoter group held just over 47% of the airline, according to data from the Bombay Stock Exchange (BSE).
SpiceJet, which once had a fleet of 74 aircraft in 2019, now operates only around 20 planes. In a recent investor presentation, the airline announced plans to raise Rs 3,200 crore through QIP, warrants, and capital infusion by Singh. This cash will be used to bring grounded planes back into service, settle liabilities, acquire new aircraft, and cover other general expenses.
The airline aims to secure Rs 2,500 crore through QIP and an additional Rs 736 crore from previously issued warrants and funds infused by Singh, as detailed in the presentation.
Earlier this year, in January, SpiceJet raised Rs 1,060 crore through preferential issues, falling short of its initial goal of Rs 2,250 crore set in December 2023.
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A source told PTI that Singh may sell as much as 15 percent of his stake, depending on market conditions. Another source told the news aggregator that Singh, who serves as both Chairman and Managing Director, will likely sell around 10 percent of his shares, though the amount could increase if necessary.
SpiceJet is currently in talks with investors, both in India and abroad, for a Qualified Institutional Placement (QIP), with commitments already made for up to Rs 2,000 crore. These funds are expected to help the airline cover operational expenses and address its various liabilities.
While no official statement has been made by SpiceJet, insiders expect the funding round to be wrapped up by the end of September.
As of June 2024, Ajay Singh and the promoter group held just over 47% of the airline, according to data from the Bombay Stock Exchange (BSE).
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The airline aims to secure Rs 2,500 crore through QIP and an additional Rs 736 crore from previously issued warrants and funds infused by Singh, as detailed in the presentation.
Earlier this year, in January, SpiceJet raised Rs 1,060 crore through preferential issues, falling short of its initial goal of Rs 2,250 crore set in December 2023.