The new investors in SpiceJet are looking to bring in ₹1,500-1,600 crore, including ₹500-600 crore through External Commercial Borrowing (ECB).
This was one of the proposals made to the Civil Aviation Ministry today, though neither Ajay Singh, one of the possible investors in SpiceJet, nor the airline’s Chief Operating Officer Sanjiv Kapoor gave specifics of what transpired at the 90-minute meeting with the Ministry officials. While SMS messages to Ajay Singh and Kapoor seeking details of the meeting and the proposal remained unanswered, sources close to the development told newspersons that SpiceJet is on track to finding an investor in the next four-six weeks. The airline had debt of ₹1,600 crore as on December 5, official sources had told newspersons earlier this month.
Opening up the ECB route is one of the suggestions the Ministry of Civil Aviation has made to the Finance Ministry to help the airline sector. Earlier this week, a senior Civil Aviation Ministry official told newspersons that if the Finance Ministry accepts this request, domestic airlines will be able raise funds abroad, at a lower rate of interest. In 2012, the Finance Ministry had allowed financially strapped airlines to take the ECB route.
Meanwhile, in a clarification to the Bombay Stock Exchange, SpiceJet said it had requested the Civil Aviation Ministry’s intervention to allow it to recapitalise. It had also sought deferment of certain dues until funds were infused.
It had urged the Ministry to consider various aspects of the sector at the macro level.
On the December 23 news item that SpiceJet was in talks with two US-based PE firms, the airline told the BSE that it was trying to recapitalise and operate at a level that would bring more efficiency in operations.
It added that it was in discussions with various entities for recapitalisation either through debt or equity.
“However, it will be inappropriate to name any entity at this stage until definitive and binding arrangements are reached between the parties,” the statement said.