Embattled airline company SpiceJet is all set to change hands. With the Marans of Sun Group not keen on investing more, Ajay Singh, one of the original co-promoters of SpiceJet, is understood to be doing due diligence of the company with a view to acquire a fresh stake in it along with a couple of financial investors.
A top official privy to the development said that the data room had been opened for due diligence along with access to documents and records of the company. Calls to Mr. Ajay Singh did not elicit a response but a person close to him confirmed the news.
The official said that the deal structure was yet to evolve adding that the Marans, who own 53.48 per cent stake in the company together with the Sun Group, were open to selling their stake and exiting. “We’re fine either way and have left it to them [incoming investors],” said the official when asked if the Marans would stay invested or sell their stake.
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A non-binding agreement has been signed with a four-week timeframe at the end of which a binding deal will be sealed if the investors are convinced after the due diligence. The official added that there is no certainty of the deal going through at this point in time. “It may or may not happen,” he said.
The SpiceJet stock shot up by 19.70 per cent on the Bombay Stock Exchange on Friday and closed at Rs.15.80 a share. It is understood that the government played a proactive role in the rescue of SpiceJet. “Hats off to the government. When we told the Ministry that we are close to shutting down, they got into overdrive and helped us by arranging a moratorium for payments to the oil companies and convincing banks to accommodate us,” the official added.
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Mr. Ajay Singh, who was a close confidant of the late Pramod Mahajan, currently holds 4.9 per cent stake in SpiceJet. He had originally held more than 12 per cent and was the de facto head of the airline as co-promoter and NRI investor Bhupendra Kansagra, kept away from day-to-day operations. The Marans acquired a 37.7 per cent stake in SpiceJet from Mr. Kansagra and investor Wilbur Ross in June 2010.
It is understood that people who were associated with the airline at some point of time but were subsequently sidelined have now become active since they see potential in the airline and are trying to ensure that it stabilises.
Meanwhile, SpiceJet in a statement on Friday announced that it is continuing to operate its full schedule of flights. Since its return to normal operation of 230 flights a day, air-fares which had gone to astronomical levels are once again coming back to more normal levels. “SpiceJet has also operated extra flights since Wednesday evening to accommodate backlogged passengers in locations such as Port Blair and Goa,” the airline said.