SpiceJet auditors raise concerns over company's networth

The auditors of SpiceJet have, yet again, raised red flags over the company’s networth. In their annual report released over the weekend, it says that the airline's accumulating losses have fully eroded its networth, reports CNBC-TV18's Sonia Shenoy.

Earlier in FY12, the airline's management had made efforts to pay-off its liabilities when it was pointed out by the auditors then. In this fiscal, the auditors said that the operating losses have been materially affected due to factors like higher maintenance charges, fuel costs etc. Also read: Tiger Airways gears up funds for SpiceJet bid : Srcs The airline's functioning 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.  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 dosen't have any real liabilities on the books. The networth is negative by around Rs 40-50 crore, but the working capital on the book still stands at about Rs 70 crore as of March. 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.