New Delhi: SpiceJet Ltd’s stock rose 7% in Mumbai trading after reports that media baron Kalanithi Maran and his wife Kavery had left the board of KAL Airways Pvt. Ltd, which owns 48.6% of the low-fare airline. The Marans leaving the board was seen by investors as a precursor to a possible share sale in SpiceJet.
The airline, however, clarified that Maran continues to be on the board of the firm and it was an organizational restructuring.
“Kalanithi Maran quit Kal Airways to only reduce the number of directorships he holds. The Marans quitting the Kal Airways board does not mean a potential sale. Kal Airways, along with Marans (in their personal capacity), hold 48.5% stake in SpiceJet Ltd. Maran continues to be on the board of directors of SpiceJet as chairman,” a spokeswoman said in a statement.
The scrip gained 7.01% to Rs.37.40 on BSE on a day the benchmark Sensex rose 0.72%.
Sun TV, promoted by Maran, said the airline needs capital to expand and will explore options, including equity contribution from existing shareholders and raising debt, but the promoters have no plans to sell their shares.
“We certainly need funds for fleet expansion and whenever there is an attractive opportunity (for partial stake sale), we will definitely look at it, but there is nothing on cards as of now,” Sun Group chief financial officer S.L. Narayanan said.
SpiceJet has been working on adding new destinations in domestic markets as well as on international routes. It commands a market share of 19.1% among the domestic firms and operates more than 300 daily flights to 38 Indian cities and four international destinations through a fleet of 36 Boeing and 12 Bombardier planes. It was recently allowed to operate flights to some new international destinations.
The market capitalization of the company improved from Rs.1,660 crore on Tuesday to Rs.1,811 crore on Monday, fuelled by the rally in the stock.
India recently allowed foreign airlines to pick up to 49% stake in Indian carriers.
Maran-controlled Sun TV Network Ltd recently won an auction for the Hyderabad Indian Premier League franchise, replacing former owner, the debt-laden Deccan Chronicle Holdings Ltd, which had its Deccan Chargers team scrapped by the Board of Control for Cricket in India (BCCI) because it was unable to furnish a Rs.100 crore bank guarantee by a 12 October deadline.
Sun won the franchise with a winning bid of Rs.425 crore, or Rs.85 crore per year, for the next five seasons of the Twenty20 cricket tournament.
PTI contributed to this story.