The plans to recapitalise and revive SpiceJet may have been finalized as far as prospective new promoters are concerned but crucial approvals are yet to come in. Sindhu Bhattacharya and Areeb Sherwani report that white knight Ajay Singh hopes antitrust regulator Competition Commission of India will wave the green flag before the week is out.
The revival plan submitted by the consortium led by former Spicejet promoter Ajay Singh is still awaiting the CCI's approval. Singh told CNBC-TV18 that Rs 400 crore rupees will be invested in the airline “Immediately after getting CCI approval, which may happen in next 1-2 days”.
Singh declined to speak further on SpiceJet's recapitalisation plan, but sources say the plan needs CCI approval because as per law.
The acquisition of any company with a turnover of more than Rs 4,500 crore must get the competition watchdog's blessing. Aside from this, no other approval, including from Sebi, will be required.
Sources say that as per Sebi's takeover guidelines, there is no need for an acquirer to make an open offer to public shareholders of a listed company if the revival and reconstruction plan has been approved by the relevant ministry. In the case of spicejet, this Rs 1,500 crore revival plan already has the Ministry of Civil Aviation's approval.
So for now, the airline is operating purely on money coming in from advance bookings.
As far as fleet goes, sources say SpiceJet continues to operate 17 Boeing 737s and 14 Q400 aircraft. The plan to expand its fleet of Boeing aircraft to 26 in the summer schedule remains unchanged.
This is being helped by the fact that the airline has received a stay order from the court against three aircraft lessors who had moved to repossess 11 Boeing aircraft for non-payment of lease rentals.
Also, Spicejet is already moving to streamline its routes to maximise profitability. It has announced new flights and additional frequencies this summer, while simultaneously suspending service to six cities: Aurangabad, Belgaum, Indore, Lucknow, Surat and Trivandrum.
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