SpiceJet not ruling out stake sale to garner funds

Amid reports of a possible stake sale, promoters of the low-cost airline SpiceJet, the Marans of Sun Group, on Friday said the airline is exploring all options to pick up funds to overcome a cash crunch.

The company did not divulge whether it is considering diluting the promoter's stake. Global aviation consultancy CAPA estimates that SpiceJet would need $250 million or close to Rs1,550 crore as also a continued flow of working capital in the near term.

"While the company is exploring various options to further capitalise, we are unable to comment on specifics at this stage," SpiceJet said in a statement.

The statement follows media reports that promoter Kalanithi Maran, who holds a 58.4 per cent stake along with the Sun Group, is exploring either a sell-out or partial dilution of his stake.

The SpiceJet management had, in the recent past, been in talks with multiple investors to raise necessary capital and bring down sticky loans, expand its fleet and tie up working capital to survive cut-throat competition in India's aviation industry.

Shares of Spicejet soared nearly 15 per cent to end at Rs16.06 on the BSE.

Meanwhile, the Bombay Stock Exchange has also sought a clarification from the airline on the media reports about the stake sale.

The airline reported the fifth straight quarter of losses for the September quarter at Rs310 crore. The losses were lower from the year-ago period when it had a net loss of Rs559 crore.

The losses came down as the airline witnessed a 15 per cent growth in total revenue. For the past fiscal, the airline had reported a record loss of a little over Rs1,000 crore.

SpiceJet chief operating officer Sanjeev Kapoor had earlier this week said the process to further recapitalise the airline was on and the airline was on track to get back in the black.

The carrier, which is currently restructuring its fleet, was aiming to have 35 Boeing planes by the end of the current year from 28 now and a fleet of 45-50 Boeing 737 by the second half of next year. However, in the past six months, the airline had brought down its fleet strength by 10 planes to 28.

The airline has also seen an exodus of senior executives and pilots over the past six months.