Capping weeks of uncertainty over its future, beleaguered SpiceJet today said its promoter Kalanithi Maran would transfer his entire stake in the carrier to the original founder, Ajay Singh, as part of plans to revive it.
The proposal of the principal shareholder and promoter, Maran and KAL Airways Pvt Ltd, to transfer the ownership, management and control of the no-frills airline to Singh was approved by the SpiceJet board at its meeting today.
In a filing to the BSE, the carrier said the step is pursuant to a “scheme of reconstruction and revival for the takeover of ownership, management and control of SpiceJet''.
The scheme would be submitted to the Civil Aviation Ministry for approval.
SpiceJet, which has been going through a turbulent patch, has been looking to infuse fresh capital as part of efforts to revive its sagging fortunes.
Promoters, Maran and Kal Airways, hold 53.48 per cent stake in the BSE-listed SpiceJet, while major ‘public’ shareholders include Tata group firm Ewart Investments (1.79 per cent) and Kalpana Singh (1.41 per cent). Retail investors hold 45.69 per cent in the company that has a total market value of Rs 1,000 crore.
According to the filing, the board has further directed the company to take further steps to implement and undertake all necessary steps, including to make the appropriate application before the ministry for seeking approval.
Our Mumbai Bureau adds:
"Its a welcome development. Failure of an airline with 17% market share is the last thing our beleaguered aviation sector needs. SpiceJet's revival is good for passengers, employees, lenders, suppliers and the industry as a whole.
Ajay Singh will have to rework his fleet, network and people strategy. The airline has excellent slots, brand and staff. Given the right support, the airline can rebuild itself over the next 8-12 months into a lean, mean and profitable airline.
The government has done well to support SpiceJet's revival without pumping in any taxpayers' money. It should now focus on long pending systemic changes regarding ATF pricing, MRO taxes and aerospace manufacturing to develop India into a robust aviation power like China", says Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.