New Delhi, Dec 8 (IANS): In what looks like a significant development for SpiceJet, two major investors have expressed interest in injecting equity into the airline, sources in the know of things claimed.

The airline's board is set to convene on December 11 to deliberate on a proposal aimed at raising fresh capital through the issuance of equity shares.

Originally, the airline had garnered interest from a single investor willing to invest between Rs 1,000 and 1,200 crore. However, the entry of a second investor into the fray has elevated the potential deal size to an impressive Rs 1,500 crore, said the sources.

Both investment proposals will be on the agenda for the board meeting scheduled for Monday.

SpiceJet, currently valued at around Rs 4,000 crore in the market, appears notably undervalued compared to its industry peers in the Indian aviation sector.

The infusion of substantial equity holds the promise of a positive turnaround for the 18-year-old airline.

The carrier boasts several strengths that could contribute to its resurgence.

Holding coveted slots and routes at key Indian and international airports, including Dubai, Thailand, Oman, Colombo, and Male, SpiceJet enjoys a competitive advantage in the market.

This strategic positioning enhances its potential for sustained growth.

SpiceJet has also a substantial order of over 200 planes with Boeing, primarily comprising the 737 Max aircraft.

In November, low-cost airline SpiceJet told the Delhi High Court about potential insolvency risks if compelled to pay an additional Rs 100 crore to former promoter Kalanithi Maran.

The airline proposed settling the dues through an equity issuance instead.

During the hearing, the court expressed skepticism over SpiceJet's insolvency claims, highlighting that such pleas are common among debtors.

The court also noted that Maran could not be compelled to accept shares as a settlement.

Meanwhile, the court also summoned the airline's Chairman and Managing Director Ajay Singh to be present in the court on the next hearing.

The case, revolving around the enforcement of a 2018 arbitral award directing SpiceJet to pay Rs 578 crore plus interest to Maran and KAL Airways, has been adjourned to January 10.

Maran claims Rs 440 crore in interest, while SpiceJet maintains it has paid Rs 100 crore following a court directive in August, owing only Rs 194 crore more.

Senior lawyer Amit Sibal, representing SpiceJet, had emphasised the airline's financial distress, citing operational losses, a negative net worth, and employee obligations that could lead to insolvency.

Sibal had urged the court to withhold judgement until the division bench rules on the arbitration dispute.

The court had raised questions about SpiceJet's contingency plan should the division bench uphold the arbitral award.

Sibal attributed the airline's financial challenges to the grounding of Boeing 737 Max aircraft, pandemic impacts, and fuel cost spikes due to the Ukraine conflict.