NEW DELHI: Budget carrier SpiceJet on Thursday said its promoters will infuse Rs 300 crore into the airline as part of recapitalisation to shore up its finances after it changed hands earlier this year.
The new majority shareholder Ajay Singh who took over from media baron Kalanithi Maran has already infused Rs 550 crore into the airline.
In a filing to the Bombay Stock Exchange, SpiceJet said its board has appointed Singh and his wife Shiwani Singh as directors. Singh will be the chairman and managing director of the company, it said in the filing but “will not draw any remuneration for the executive functions to be performed by him”.
SpiceJet’s board has also appointed Harsha Vardhana Singh as an independent director. Singh served as deputy director general of the World Trade Organisation, and also as economic adviser and secretary to the Telecom Regulatory Authority of India. He is adjunct professor at Columbia University. SpiceJet has also got government approval to appoint Tejpreet S Chopra, former president and CEO of General Electric in India, Sri Lanka and Bangladesh as an independent director.
A senior executive said that appointment will likely be taken up in the next board meeting. SpiceJet will announce its fourth quarter results on May 28.
The board has also approved a plan of increasing the fleet size of the airline to 50 aircraft by the end of March 2016. It currently has an operational fleet of 20 Boeing 737 planes and 14 Bombardier Q400s. It plans to add seven and return three leased Boeing planes by October. The rest–also Boeing–will join by the end of this financial year.
Ajay Singh came on board SpiceJet, when it was rumoured to be on the verge of a shutdown, hit by a major cash crunch. It was forced to return planes on non-payment of lease rentals; it delayed salaries to employees; oil companies denied it fuel uplifts for a short while. The airline cancelled more than 2,000 flights and lost or let go 30% of its work force.
A senior executive at the company said all of the first tranche of Rs 550 crore has been used up in payment of pending lease rentals and other dues. Singh has in interviews spoken a total investment of Rs 1,200 crore and bringing in a “blue chip investor” on board. That “will be announced soon” said the executive quoted above.
The airline however is on a recovery path and drawing up expansion plans. In line with the additional planes, it plans to appoint 400 cabin crew in the next few months. An interview will be held on May 24. It also had tests for 100 pilots on Tuesday, said the executive.
