The Competition Commission is looking into SpiceJet’s proposed deal with its original promoter Ajay Singh and a decision is yet to be finalised. Amid turbulent times, the carrier’s board has approved a deal that would see change of ownership as well as infusion of fresh funds.
The proposed deal, which has been cleared by the Civil Aviation Ministry, is awaiting certain clearances, including from the Competition Commission of India (CCI). According to a CCI official, the Commission received the notice regarding SpiceJet deal about “10-15 days” ago and a final decision on the matter is yet to be taken.
SpiceJet did not offer any immediate comments on the matter. Under the revival plan, the carrier’s original promoter Ajay Singh would acquire majority stake and control in the airline. Besides, outgoing promoters, Maran family, would put in funds.
Last week, SpiceJet had said the first tranche of recapitalisation would happen “very soon.” The SpiceJet board, in late January, had approved transfer of Maran family’s entire 58.46 per cent existing stake to Mr. Singh, while the company would raise Rs 1,500 crore through issuance of fresh securities.
Besides, Marans would also infuse Rs. 375 crore into the budget carrier in lieu of ‘non convertible preference shares’ to be allotted to them despite they offloading their entire existing equity stake in favour of Mr. Singh and resigning from the board of the airline.
SpiceJet’s net loss widened to Rs. 275 crore in three months ended December 2014, mainly on account of lower passenger numbers and a one—time cost of Rs 295 crore.
The airline was forced to ground flights for some days during the December quarter after its vendors refused to offer credit. This resulted in the airline seeing a 31 per cent decline in capacity, while revenue fell 27 per cent to Rs 1,300 crore.
