SpiceJet board clears raising of Rs 1,500 cr as Marans alight

Furthering the revival of the troubled SpiceJet, the board of directors of the airline has approved raising of Rs 1,500 crore through issuance of fresh securities. The board has also approved the transfer of Maran family’s entire 58.46% existing stake, worth around Rs 700 crore at the current market price, to co-founder Ajay Singh.
The airline, which has been facing rough weather, will also get around Rs 375 crore from the Marans in lieu of the non-convertible preference shares to be allotted to them despite their offloading the entire equity stake in favour of Singh. Paving the way for Ajay Singh to take control of SpiceJet, Kalanithi Maran, his wife Kavery Kalanithi and managing director S Natrajhen have resigned from the board.
While the pricing details with regard to the share transfer by Marans were not disclosed, sources said Singh might infuse fresh funds into the carrier and bring in some foreign investors, as was reported sometime ago. The board, in a meeting on Thursday, also approved changing the airline’s registered office from Tamil Nadu to Delhi. The company’s Articles of Association would also be amended.
According to a regulatory filing by SpiceJet, the embattled airline will issue up to 37.5 lakh non-convertible cumulative redeemable preference shares of Rs 1,000 apiece to Kalanithi Maran or Kal Airways, or both.
SpiceJet said its board of directors has taken on record the share sale and purchase agreement between the company, Kalanithi Maran, Kal Airways and Ajay Singh. Besides, the board has cleared a proposal to issue equity shares/warrants and/or any instrument convertible into equity shares whether optionally or otherwise/global depository receipts (GDRs)/American depository receipts (ADRs)/foreign currency convertible bonds (FCCBs) for an aggregate amount not exceeding Rs 1,500 crore or equivalent currencies to any person or persons, whether or not shareholder of the company.
The company’s authorised share capital would be increased to Rs 2,000 crore. This would be divided into 150 crore equity shares of Rs 10 each and 50 lakh non-convertible cumulative redeemable preference shares Rs 1,000 each. SpiceJet would seek shareholders’ nod through a postal ballot for all these proposals.
SpiceJet had last week got the civil aviation ministry’s approval for its reconstruction and revival plan. Following a board meeting, SpiceJet had on January 15 submitted a revival plan proposing transfer of Kalanithi Maran’s promoter stake as well as management control to the airline’s co-founder Ajay Singh.
In further impetus to the revival plan, the Directorate General of Civil Aviation (DGCA) had lifted a ban on advance seat bookings by SpiceJet. Kalanithi Maran, chairman and managing director of the media conglomerate Sun Group, had in 2010 paid Rs 750 crore to buy 38% in SpiceJet from American PE investor Wilbur Ross and the UK-based Kansagra family.