SpiceJet co-founder Ajay Singh has become the airline’s promoter after former owners Kalanithi Maran and Kal Airways concluded the transfer of their entire ownership to him.
“…pursuant to the share sale and purchase agreement dated January 29, 2015, the entire shareholding of Kalanithi Maran and Kal Airways (the existing promoters) aggregating to 350,428,758 equity shares, or 58.46%, has been transferred to Ajay Singh on February 23, 2015,” SpiceJet said on Tuesday.
The airline also said that it has cleared its major outstanding dues related to income tax (TDS) payments. It had earlier this month also cleared all service tax dues and employee salaries.
“This is the first major step in our settling our payables to various creditors, which we will do as per mutual discussions and payment plans that are being put together,” said Kiran Koteshwar, acting CFO, SpiceJet.
“We have also paid all salaries to our staff, and have started making meaningful payments to our other business partners,” he added.
A former co-founder of SpiceJet, Ajay Singh, had quit the airline in 2010. He came back to the airline after Maran’s Sun Group said that it was unable to inject more funds to revive the troubled carrier.
Under Kalanithi Maran, SpiceJet accumulated losses crossed the R3,000-crore mark and faced a severe cash crunch after clearing liabilities of about R400 crore towards income tax and service taxes in October. This forced the carrier to survive from daily earnings from forward bookings — about R13-14 crore a day at the time.
The airline, which cut down its fleet and routes to keep costs low, was also grounded for a day and half in December after it failed to pay off dues to vendors and oil marketing companies.
The situation changed after Singh came forward to save the airline in December. In late January, the SpiceJet board approved transfer of entire 58.46% stake of Marans to Singh. Under the revival plan, SpiceJet would see a capital infusion of R1,500 crore from Singh in a staggered manner by April.
“Our resurgence is very much on track,” said Sanjiv Kapoor, chief operating officer of SpiceJet. “Load factors are in the mid-80s, on-time performance has bounced back nicely and is now regularly hitting 90%, and we are flying over 200 flights a day, to increase to 280 daily flights in April”, he added.
Singh who has already pumped in R100 crore into the airline, which has been utilised to pay off taxes, is expected to infuse R400 crore more by Wednesday.
As per the plan, Singh would pump in another R500 crore by March, followed by R500 crore more by April end.