New Delhi: Beleaguered carrier SpiceJet needs to make a concerted effort to go back to its low-cost roots as chances of former promoter Ajay Singh wresting back control of the airline increase.
Singh, who used to run SpiceJet till it was sold off to the Marans in 2010, is doing due diligence of the airline. Sources close to him said the consortium of foreign PE investors he was representing maintained that SpiceJet's woes were "fixable".
Singh may step in once a final amount to bail out the airline is decided and consultations with PE investors on funding are over. "The takeover, if it comes through, will happen in the new year. One thing is clear that investors would like the Marans to exit and a new management to come in," sources said.
At present, promoters hold about 49 per cent in SpiceJet, with Kalanithi Maran owning 16 per cent of the shares. Institutional investors hold about 17 per cent, corporates another 11 per cent and large individual shareholders around 11 per cent.
Sources said the airline, which ended 2013-14 with a loss of Rs 1,003 crore, has accumulated losses of over Rs 3,000 crore. "The airline will need to be restructured, too many stations have been opened, engineering contracts will have to be reworked and all these fire sales will have to end."
"Most importantly, the nature of the airline will have to be brought back to that of a low-cost one. It has changed and become quite a high-cost one at the moment with all kinds of frills," sources said.
22/12/14 Jayanta Roy Chowdhury/Telegraph
To Read the News in full at Source, Click the Headline
Singh, who used to run SpiceJet till it was sold off to the Marans in 2010, is doing due diligence of the airline. Sources close to him said the consortium of foreign PE investors he was representing maintained that SpiceJet's woes were "fixable".
Singh may step in once a final amount to bail out the airline is decided and consultations with PE investors on funding are over. "The takeover, if it comes through, will happen in the new year. One thing is clear that investors would like the Marans to exit and a new management to come in," sources said.
At present, promoters hold about 49 per cent in SpiceJet, with Kalanithi Maran owning 16 per cent of the shares. Institutional investors hold about 17 per cent, corporates another 11 per cent and large individual shareholders around 11 per cent.
Sources said the airline, which ended 2013-14 with a loss of Rs 1,003 crore, has accumulated losses of over Rs 3,000 crore. "The airline will need to be restructured, too many stations have been opened, engineering contracts will have to be reworked and all these fire sales will have to end."
"Most importantly, the nature of the airline will have to be brought back to that of a low-cost one. It has changed and become quite a high-cost one at the moment with all kinds of frills," sources said.
22/12/14 Jayanta Roy Chowdhury/Telegraph
