SpiceJet tanks 7% on auditors' networth concern remarks

Active selling in shares of SpiceJet dragged the stock in morning trade on Monday as auditors of SpiceJet have, yet again, raised red flags over the company's net worth. Shares of the low-budget carrier tanked around 6.6 percent on the BSE.

Auditors in their annual report released over the weekend, say that the airline's accumulating losses have fully eroded its networth. Earlier in FY12, the management had made efforts to pay-off its liabilities when auditors had pointed out the same issue.

In this fiscal, the auditors said that the operating losses have been materially affected due to factors like higher maintenance charges, fuel costs etc.

The airline's going concern now depends on its ability to establish consistent profitable operations and raise adequate finance to meet its short and long-term debt obligations, the auditors say.

However, SpiceJet stated that the losses have reduced drastically in FY13. The net losses reduced to Rs 192 crore versus Rs 605 crore in FY12. It added that the losses are 50 percent higher than the networth now and it does not have any real liabilities on the books.

Promoters of the airline are also ready to infuse funds through debentures or loans as their equity limit has been exhausted when they hiked their stake by about five percent last fiscal.

At 10:20 hrs, the stock was quoting at Rs 19.65, down Rs 0.80, or 3.91 percent on the BSE.