The board of SpiceJet Ltd at its meeting held on Thursday decided to transfer control of the airline to Ajay Singh, who used to run the airline previously.
Mr. Singh has about 5 per cent stake in the airline and is taking control with the help of financial investors. Details of the financial dealings have not been revealed.
"The Board of Directors of the Company at its meeting held on January 15, 2015, has taken on record the proposal of the principal shareholder and promoter Kalanithi Maran and KAL Airways Private Limited to transfer the ownership, management and control of the company to Ajay Singh pursuant to a ‘Scheme of Reconstruction and Revival for the takeover of ownership, management and control of SpiceJet Limited’ to be filed before the Competent Authority, the Ministry of Civil Aviation, Government of India," SpiceJet said in a statement to stock exchanges.
"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 of Civil Aviation, Government of India for seeking approval of the ‘Scheme of Reconstruction and Revival for the takeover of ownership, management and control of SpiceJet Limited" the statement added.
The Hindu had on December 20, >reported about the possible change in ownership at SpiceJet.
'Welcome development'
Analysts have expressed happiness with SpiceJet getting a new lease of life.
"It's a welcome development. Failure of an airline with 17 per cent 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," said Amber Dubey, Partner and India head of aerospace and defence, KPMG.
He said Mr. Singh will have to rework SpiceJet's 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," Mr. Dubey said.
Complementing the government's efforts to support SpiceJet's revival without pumping in any taxpayers' money he said the government 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.
