New Delhi: Indian budget carrier Spicejet expects fund raising to be “challenging,” after media reports that linked the firm’s majority owner to a massive corruption scandal, its chief executive said on Friday.
India’s textile minister, Dayanidhi Maran, the younger brother of Spicejet’s majority owner Kalanithi Maran, was named in a lawsuit related to a telecom probe, media reports said on Thursday.
Kalanithi Maran, who owns 38.7% stake in Spicejet.
“It is very unfortunate for us to get associated with this anyway, because we do not have anything to do with it. But how do you stop that association other than keep confirming that we are not involved?” Neil Mills said.
SpiceJet shares plunged 16% on Thursday, after India’s federal police also confirmed a preliminary probe against Dayanidhi Maran, who was telecom minister from 2004 to 2007, and is the younger brother of Spicejet’s majority owner Kalanithi Maran.
Spicejet needs $200-250 million to fund aircraft purchases in 2011/12, which will be raised through a share sale and export credit.
Mills said fund raising will happen in the next 9-12 months, but the company is yet to finalise exactly how much it will raise.
“It will be challenging. But raising capital in airlines is always challenging. We believe as we have a successful business and profitable, unlike many of our peers, with a good prospect going forward,” he said.
“I don’t think it will be impossible at all”