SpiceJet gets new breath of life

New Delhi: SpiceJet executives on Friday met civil aviation ministry officials and discussed their proposed financial revival plans during which it was indicated that the airline could raise Rs1200 crore soon for recapitalisation. Sources said the airline has also indicated that it could raise Rs 600 crore through external commercial borrowings. But sources said the ministry wants some concrete mov-ement on substantial fin-ancial investment in the airline by private investors.

Sources said the SpiceJet executives pressed for financial relief from the government for the cash-strapped airline but the ministry wants to see substantial funds in the airline’s bank account first from the investors. Sources said top SpiceJet executives made a presentation to ministry officials. “It was a constructive meeting,” SpiceJet’s chief operating officer (COO) Sanjiv Kapoor was quoted by news agencies, as saying. He was accompanied by the airline’s former promoter Ajay Singh.

However, the ministry does not want a situation where the government organisations including the state-owned Airports Authority of India (AAI) have to wait indefinitely for their dues to be paid. State-owned oil firms are already reluctant to give any extended credit to the financially-ailing airline. While the US-based inve-stment firm JP Morgan may show interest in inve-sting in cash-strapped airline SpiceJet, as part of a group of investors headed by the airline’s former promoter Ajay Singh, an investment of $217 million (more than Rs1200 crore) could be pumped into the airline over several mont-hs by this group of investors to recapitalise the airline.

It may be recalled that Prime Minister Narendra Modi is understood to have recently expressed concern over the financial deterioration of SpiceJet which was on the verge of closure till recently and is believed to have asked for details on the situation in the last Cabinet meeting.The government had informed Parliament earlier this week that Spice-Jet owed dues of Rs 742 crore to foreign vendors (lessors, maintenance and repair organisations) and Rs 488 crore to local vendors (service tax, income tax, oil companies, airport operators etc) as on December 10. The dues had risen sharply compared to even on December 5.

Sources said Mr. Singh had asked for some more time for the investments to be made and that the process may be slightly delayed by about two to three weeks due to the current season festivities in the United States.