CCI nod awaited for reversion of SpiceJet control to Ajay Singh
18 Feb 2015
The Competition Commission of India (CCI) is looking into cash-strapped carrier SpiceJet's deal with its original promoter Ajay Singh for a reversion of the airline's ownership, but has not come to a final decision yet.
The deal has been cleared by the civil aviation ministry, but still awaits various clearances, including from the CCI, according to a PTI report.
According to a CCI official, it received the notice regarding SpiceJet deal about "10-15 days" ago, but a final decision is yet to be taken.
SpiceJet refused to immediately comment on the matter.
Under the revival plan, the carrier's original promoter Ajay Singh would re-acquire a majority stake and control of the airline. Besides, the current promoters, the Maran family of Tamil Nadu, would put in their share of funds.
Last week, SpiceJet had said the first tranche of recapitalisation would happen "very soon".
The SpiceJet board in late January approved the transfer of the Maran family's 58.46 per cent stake to Singh, while the company would raise Rs1,500 crore through issuance of fresh securities.
Besides, the Marans would also put in Rs375 crore into the carrier in lieu of non-convertible preference shares to be allotted to them despite their offloading their entire equity stake in favour of Singh and resigning from the board of the airline.
SpiceJet's net loss widened to Rs275 crore in the three months ended December 2014, mainly on account of lower passenger numbers and a one-time cost of Rs295 crore.
The airline was forced to ground flights for some days during the December quarter after its vendors refused further credit. This resulted in the airline seeing a 31 per cent decline in capacity, while revenue fell 27 per cent to Rs1,300 crore.
