With net worth in red, SpiceJet joins club of ‘bad times’

A third successive quarterly loss has taken the net worth of the country’s second-largest low-cost airline, SpiceJet, into negative territory, for the first time since the Kalanithi Maran-promoted Sun Group took over its management. As on December 31, 2011, the airline’s net worth stood at negative Rs 23.89 crore, thereby seriously hampering its ability to raise necessary cash from the market to fund its needs.
Commenting on the financials, SpiceJet’s auditors said: “As on December 31, 2011, the company’s accumulated losses of Rs 1,077.81 crore has substantially eroded the net worth of the company, indicating the existence of a material uncertainty that may cast doubt about the company’s ability to continue as a going concern.” It now joins BSE-listed rivals Jet Airways and Kingfisher, which are struggling for survival with combined accumulated losses of over Rs 7,700 crore. Kingfisher too had a negative net worth for the September 2011 quarter.
SpiceJet is not new to a negative net worth situation. In FY’09 and FY’10, the company’s net worth stood at a negative Rs 430 crore and Rs 342 crore, respectively, according to analysts tracking the sector.
07/02/12 Indian Express

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Categories: spicejet Feb 2012