Cash-strapped SpiceJet is likely to receive the first tranche of investment for recapitalisation by the end of this week, with additional fund infusion expected by the beginning of February.
Former promoter and director of SpiceJet Ajay Singh along with US bank JPMorgan Chase are scheduled to submit a final proposal detailing capital infusion plans in the airline later this week.
Singh and JPMorgan Chase are understood to be considering investing about $200 million in the carrier that is struggling to stay afloat. The new investors plan to buy out the entire stake of current promoter Kalanithi Maran.
A senior official in the ministry of civil aviation said, “They have assured us that they will mobilise some funds by January 8-10. This capital would be sufficient to hold on to current level of operations. The remaining resources will be in in a month’s time.”
A cash crunch at SpiceJet has meant that the airline has had to curtail the number of daily departures to 230 flights from 345 last July. The airline currently has 20 Boeing 737s in its fleet, nearly half of the 37 aircraft it had at the end of the last financial year.
“We have directed them to provide bank guarantees to cover outstanding liabilities once they mobilise funds. They will be informing us about the status of scheduled investments this week. Post this, a decision will be taken regarding extending the moratorium on payments granted until January 10”, added the official.
A second ministry official said, “So far the signs are positive. They have renewed two bank guarantees amounting to Rs 15 crore. Flight operations are stable, there are hardly any cancellations. They have also made some payments to some airport operators.”
A person in know of the development, said since the restriction on not accepting bookings beyond 30 days was eased, the airline has started generating Rs 9-10 crore a day. Expenses stand at around Rs 5 crore, which is sufficient to maintain operations at the current level.