SpiceJet in talks with investors to raise over Rs1,500 crore
26 May 2014
Low-cost carrier SpiceJet is in talks with investors to raise badly-needed funds after the airline reported losses of over Rs1,000 crore in the previous fiscal ended 31 March 2014.
The airline also said it is seeking approval from the civil aviation ministry for an additional 7,000 seats a week to Qatar, denying reports of selling its slots in Doha airport to Qatar Airways.
SpiceJet, India's second-largest low-cost carrier, currently operates flights to Dubai, Sharjah and Muscat in the Gulf region.
SpiceJet reported a five-fold increase in its annual loss at Rs1,003.24 crore for the fiscal year ended 31 March 2014, from a net loss of Rs191.07 crore during the previous financial year.
This means that the Kalanithi Maran-owned SpiceJet, which has a 20-per cent share in the domestic market, lost an average of Rs2.75 crore every day that it flew.
Total income from operations during the January-March 2014 quarter, however, increased 8.4 per cent year-on-year to Rs1,589.61 crore from Rs1,466.74 crore, SpiceJet revealed in a filing with the Bombay Stock Exchange last week.
The loss-making carrier, however, said it soon hopes to retire part of its Rs1,516 crore short- and long-term debt after a stake sale to an investor, which, according to reports, could be Qatar Airways.
SpiceJet chief operating officer Sanjiv Kapoor did not reveal the identity of the investor and merely, "we are in discussions with investors. I cannot name anybody now. We will announce it sooner or later."
''We have been in discussions with an investor and sooner or later we will announce it. I cannot name the company right now. It will be a small stake sale and retiring some of the debt will give us the confidence to focus on re-building the airline,'' he said.
He said a few investors had evinced interest in the company and the promoters were pumping in money into the airline.
Most Indian carriers have been in discussions with investors after the government allowed up to 49 per cent foreign investment in domestic airlines in September last year.
While the country's top airline Jet Airways airlines was the first to tap foreign capital with sale of 24 per cent stake to Etihad for over Rs2,000 crore, other airlines like SpiceJet and Go Air are also reported to be looking to tap FDI to bolster their finances.
Officials from the state-run Qatar Investment Promotion Authority are also reported to be on the prowl looking for investment opportunities in India's loss-hit airlines.
Meanwhile, IndiGo also recently amended its memorandum of association through a special resolution passed at a board meeting last month allowing the company to form joint ventures or sell stake.