Manisha Singhal/Business Standard

Mumbai, Jul 12: Siddhant Sharma, chief executive officer of Delhi-based SpiceJet, has put in his papers even as the budget carrier is struggling to stay afloat.

Sharma has been with the airline since its inception in 2005. SpiceJet was positioned as a budget airline after a group of shareholders bought S K Modi-run Modiluft and renamed the airline.     

His resignation comes at a time when the cash-strapped airline is looking at various ways to get in fresh investment. The airline will either look at a merger with Kingfisher Airlines, which is promoted by liquor baron Vijay Mallya, or a possible infusion from US distress fund Wilbur Ross, which is willing to pump in money. 

When contacted, Sharma refused to comment. But sources within the airline confirmed the move and said, "Yes, he has put in his papers but that has nothing to do with the current developments within the company. The move had been thought of earlier."

It is also not clear whether Sharma will be joining any other airline.

According to sources, however, Sharma would have stayed on if the company had deeper pockets. Sharma has been in various posts in the airline and was even the chairman at one time before getting into the day-to-day running of the airline. 

The resignation has apparently been accepted by the board of directors according to sources. The board has asked him to continue till the end of this month to which Sharma has reportedly agreed to.

Meanwhile, the board of directors will be meeting to finalise the funding or a possible merger for the airline sometime next week. The carrier had appointed merchant bankers Rothschild to chart the way forward for the airline, raise $100 million to manage cash flows and also to fund fleet expansion.

The airline is set to take deliveries of five Boeing 737s over the next five months.

According to well-placed sources, the negotiation with Kingfisher is stuck as the shareholders want Rs 100 crore in cash in exchange for a nod to a share swap deal in the ratio of 1:3. 

"Kingfisher had agreed to the cash component earlier but later withdrew," said a source.

Ross is willing to invest nearly $100 million and is working a way around the FDI norms, which permit a maximum of 49 per cent foreign investor stake in airlines.