IndiGo co-founder and former promoter, Rakesh Gangwal, is considering a “sizable” stake acquisition in the budget airline SpiceJet, as reported by ET Now. According to the report, Gangwal is in advanced negotiations with the carrier.
As of the end of June, Rakesh Gangwal and his wife, Shobha Gangwal, held 13.23% and 2.99% stakes in IndiGo’s operating company, InterGlobe Aviation, respectively. The Chinkerpoo Family Trust, associated with them, also possesses a 13.5% stake, according to exchange data quoted by ET.
SpiceJet is grappling with financial challenges and is actively seeking funds due to a cash crunch. Earlier this year, the airline came under “enhanced surveillance” by the aviation regulator. SpiceJet has been dealing with several lessors seeking to repossess leased aircraft, and some of the cases have been resolved by the airline. Roughly a quarter of its fleet remains grounded in the face of intense competition within the aviation sector.
Recently, SpiceJet issued over 4.81 crore equity shares on a preferential basis to nine of its aircraft lessors to settle outstanding dues of Rs 231 crore. Additionally, the airline and lessor Celestial Aviation are in advanced negotiations for a settlement, which was disclosed to the insolvency tribunal NCLT.
Celestial Aviation Services has claimed a default of $29.9 million for nine aircraft, making it the fifth lessor to approach NCLT against SpiceJet. Other lessors, such as Willis Lease Finance, Aircastle, and Wilmington, have also initiated pleas to commence insolvency proceedings against SpiceJet before the NCLT.
Notably, the NCLT suggested on September 5 that SpiceJet resolve issues with lessors seeking insolvency proceedings, which came against the backdrop of the airline offering shares in lieu of dues to nine aircraft lessors.
In its most recent June quarter report, SpiceJet posted a consolidated net profit of Rs 197 crore, a notable improvement from the net loss of Rs 783 in the same period the previous year. Following reports of Rakesh Gangwal’s potential stake acquisition, SpiceJet’s stock surged, surging as high as 20% before closing the day 18% higher.