New Delhi: Chennai-based Sun TV Network Ltd chief Kalanithi Maran took control of Gurgaon-based carrier SpiceJet Ltd on Monday by inducting new board members and a new chief operating officer, concluding the acquisition announced five months ago.
Maran, who attended his first formal board meeting in Gurgaon on Monday, will be the new chairman of the company with the single largest stake of 38.66% through KAL Airways Pvt. Ltd.
It paid Rs 746 crore after the June announcement for a 37.7% stake in the airline, which was followed by an open offer that ended earlier this month. The final deal size was not disclosed on Monday.
“I am extremely excited to lead the airline on this growth path,” Maran said in a statement released after the board meeting, referring to orders placed this month for short-haul aircraft. “It is our vision that domestic air connectivity is incomplete without looking at the tier-II and tier-III cities.”
The 30 Q400 NextGen turboprop aircraft from Bombardier Inc. of Canada for connecting small cities will join the airline’s fleet from the second quarter of the next calendar year, adding to its existing fleet of Boeing Co. 737 aircraft. It currently has 153 flights daily to 20 cities with around 25 aircraft, giving it a 13% domestic marketshare.
SpiceJet’s new board will be dominated by the Marans. It will include key members from the Sun TV group besides Maran. These include Kavery Kalanithi, S. Sridharan, J. Ravindran, Nicholas Martin Paul and M.K. Harinarayanan. Those exiting include B.S. Kansagra, Kishore Gupta, Mukkaram Jan and Vijay Kumar, besides Atul Sharma, Ajay Singh and Wilbur Ross representative Ranjeet Nabha.
Former promoter Kansagra, who attended his last board meeting on Monday at SpiceJet, said the airline “has entered a very new and exciting phase of expansion” and Maran’s “business acumen and vision will not only strengthen SpiceJet but will also redefine the way low-cost carriers are viewed in India”.
S. Natrajhen, chief financial officer (CFO) of Sun TV Network, will be the new chief operating officer (COO) of SpiceJet, supporting newly appointed chief executive officer (CEO) Neil Mills, formerly CFO of West Asian low-cost start-up flydubai before shifting to India last month. The budget airline also appointed R. Neelakantan as its new vice-president (finance), said a person familiar with the development who did not want to be named.
An analyst said the appointment of the new COO is surprising.
“The board control within the family was on expected lines,” said Centre for Asia Pacific Aviation’s India CEO Kapil Kaul. “What was not on expected lines was a COO, because in airline parlance, this is a very technical field. I hope they induct independent directors who have (a) strategic understanding of the business, to execute the aggressive and bold business case they have now. That would define their future.”
SpiceJet shares slipped 1.1% to end at Rs 85.70 on the Bombay Stock Exchange, while the benchmark Sensex rose 0.76%.