New Delhi, Dec 26 (IANS): Even as passengers continued to suffer due to SpiceJet's truncated operations, the airline's management along with new investors submitted a revival plan to the civil aviation ministry, proposing a Rs.300 crore infusion and a subsequent Rs.1,200 crore buyout to keep the airline afloat.
According to ministry officials, the company's chief operating officer Sanjeev Kapoor along with co-founder Ajay Singh submitted a revival plan which incorporated an equity infusion of Rs.300 crore which has been backed by banks.
The airline is also hopeful of an infusion of an addition Rs.1,200 crore ($200 million), from the new investors led by Ajay Singh and a private investment bank which will initially buyout a minority stake in the troubled airline. They will subsequently increase their holding and invest further into strengthening the budget carrier's operations.
Singh, the co-founder of the airline, had earlier sold his stake in 2010 but is now interested in investing back in the budget carrier to save it from shutting operations.
The company's management informed the ministry through the revival plan that they have cleared all pending dues of the employees and the oil marketing companies (OMCs).
After the meeting, Kapoor said that the airline has already received Rs.17 crore from the new investors and that it has wiped off all its dues to employees and the oil companies.
However, the budget carrier's dues to other vendors have increased to Rs.1,230 crore from Rs.990 crore during Nov 24 to Dec 10. The company has somehow managed to salvage some its operations with Rs.300 crore loan against collateral from banks.
The airline is currently operating 230 flights per day with a fleet of 18 aircraft. The temporary restriction on ticket sales of 30 days which was imposed on Dec 5 has also been relaxed by the aviation regulator.
Earlier in the month, the cash-strapped budget carrier was given a 10 days interim relief by the civil aviation ministry, as its promoters were told to infuse fresh equity.
The decision came after the company submitted an initial operations plan for safety and financial revival.
Under the interim relief, the airline was provided more time to pay its dues to oil companies and airport operators.
The ministry and the aviation regulator had to step-in after the airline said that as part of its cost-cutting initiative, it would only operate 22-24 aircraft, down from 35 planes which were in service till two months ago.
The airline recently reported a Rs.310 crore loss for the quarter ended September, down from the Rs.560 crore loss in the corresponding period of last fiscal.
Even the company's auditors SR Batliboi & Associates have doubted the airline's ability to stay afloat.
Meanwhile, the company's scrip zoomed up by 11 percent in the intra-day trade session Friday.
The company's scrip at the Bombay Stock Exchange (BSE) rose to 11.04 percent at Rs.19.60 per equity share from its previous close of Rs.17.65. The stock closed lower at the end of the day's trade at Rs.19.25, up 9.07 percent or 1.60 point.