By FE Bureau
Low cost carrier SpiceJet on Tuesday said that it is in “advance” talks to get a capital infusion, four days after it posted its biggest ever annual loss, which stood at Rs 1,003 crore for the recently concluded financial year.
“We are in very advanced stages of a capital infusion discussion with an external entity that when completed will help us clean up our arrears and rebuild with confidence,” SpiceJet said in a statement.
The airline however refused to name the company or give further information whether it was looking at equity infusion in the form of stake sale or capital infusion from an interested party without a possible sale of stake.
According to a recent report by Sydney-based aviation think-tank Centre for Asia Pacific Aviation (CAPA), SpiceJet requires at least Rs 1,200 crore funds to remain in the skies.
For the March quarter, the budget airline had posted a net loss of Rs 321.5 crore on the back of high aircraft fuel cost, pricing pressures from competition and general economic slowdown.
Spice Jet last posted a profit during Q1, Fy 2014, which has been followed by three quarterly losses. Meanwhile, the auditors of the company, SR Batliboi & Associates LLP, have repeatedly during the last few quarters raised concerns about its ability to stay afloat as the airline’s operating losses completely eroded its net worth.
The carrier owned by billionaire Kalanithi Maran had in March said that it saw “little chance” of luring investment since with a high debt, and an intensifying competition the company’s net worth had been wiped out. However, the much needed capital infusion would allow the airline to remain in the skies.
The shares of SpiceJet closed at Rs 17.05 per share at the Bombay Stock Exchange (BSE) on Tuesday, up 3.02% from the previous day. The bourse’s benchmark index, Sensex closed 0.06% higher at 24,376.88 points.
In a seperate statement, the airline said it has promoted Kamal Hingorani as senior vice-president and head of customer experience, besides hiring Ashwin Noronha as the head of ground and airport services. At present, Hingorani is SVP and heads ground and airport services. In his new role, Hingorani will have the in-flight, catering, and customer relations teams reporting to him. He will also be responsible for customer interface training for ground and airport services (including security) in addition to inflight services department. Meanwhile, Noronha, with over 14 years of airline industry experience and specialises in ground handling and airline ground operations, will be joining SpiceJet from the consulting and auditing firm KPMG. He had earlier worked with Air India SATS, Jet Airways and Qatar Aviation Services.