NEW DELHI: Ajay Singh’s SpiceJet may get a lifeline next week with airline sources claiming they are on the verge of tying up with “two big investors”. While one entry could invest about Rs 1,000-1,200 crore, the other could also put in another upto Rs 300 crore they claim. The airline has been struggling over the past few months due to a severe cash crunch leading to just a part of its fleet being operational and poor onetime performance with nearly 40-45% flights delayed daily. Last week an aircraft lessor seized a SpiceJet aircraft when it landed in Dubai over dues and before that a number of lessors had repossessed planes for the same reason. The LCC desperately needs funds to stay afloat as October and November salaries are delayed and it has also been defaulting on statutory dues like TDS and PF.“Two big investors have shown interest in infusing equity into SpiceJet. The airline’s board will meet on Monday (Dec 11) to decide on the proposal to raise fresh capital through the issue equity shares. Initially, there was one investor ready to invest Rs 1,000-1,200 crore. Now a second investor has also shown interest to invest in the company and the total deal size could rise to Rs 1,500 crore,” said sources close to the development.
“Both the proposals will be taken up by the board on Monday. With its market capitalisation currently at about Rs 4,000 crore, SpiceJet appears to be significantly undervalued when compared to its peers in the Indian aviation industry. A substantial equity infusion into the airline can turn around the fortunes of the 18-year-old airline. The airline has coveted slots and routes at all important Indian and international airports like Dubai, Thailand, Oman, Colombo and Male, providing a competitive edge in the market and contributing to its potential for sustained growth,” the airline sources claimed.
Regarding the aircraft seizure in Dubai last week, SpiceJet said in a statement: “The Dubai International Financial Centre (DIFC) Court on October 20, 2023 issued a freezing order (order) in relation to certain engines installed on aircraft bearing Indian registration mark VT-SLM. As a result of the aforesaid order, the aircraft was grounded at Al Maktoum International Airport, Dubai (DWC), and has remained there since. In a DIFC Court hearing on December 7, 2023, the order was discharged in favour of SpiceJet.”
“Additionally, the judge has directed an inquiry into losses suffered by SpiceJet as a result of the order having been made. The court has further ordered to pay towards the legal costs incurred by SpiceJet…. there isn’t any order of the DIFC Court restricting SpiceJet from operating the aircraft, including departing from DWC,” the statement added.