SpiceJet will return to being a "true low cost airline" if Ajay Singh and two international private equity investors who are currently doing due diligence finally decide to pick up a stake in the airline, people close to the development say.
Sources add that the due diligence involves trying to figure out whether there is a package that can be worked out for the airline which is fundable and thus help shave off the past liabilities of the airline and which will also work in the future.
A decision on whether Ajay and the two PE investors will invest in SpiceJet is expected within the next four-to-six weeks. If Ajay and the two PE investors do decide to make an offer which is accepted it is likely to see the Marans no longer being involved in the management of the airline although they could still have a minority stake in it. The airline is currently controlled by billionaire Kalanithi Maran’s Sun Group.
While Ajay was not available for comments, people close to him say that those carrying out due diligence feel that there is tremendous potential in the airline given that global prices of fuel are at an all time low, the market is large and there is a new Government at the centre.
Ajay is considered close to the ruling BJP and is talked off as being one of the people behind the party’s latest electoral campaign which swept Narendra Modi to power. Earlier he was also associated with the party’s leader Pramod Mahajan.
At least one of the two PE firms which Ajay has tied up with already has exposure in an airline and is keen to get a foothold in the Indian market.
Ajay has in the past few days met with S.L. Narayanan, Chief Finance Officer, Sun TV, sources confirmed.