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Business News/ Companies / News/  SpiceJet plans to raise Rs300 crore, increase fleet size
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SpiceJet plans to raise Rs300 crore, increase fleet size

The carrier looks to increase its fleet size to 45-50 aircraft by the end of fiscal year 2016

The company’s board on Thursday appointed Ajay Singh as its managing director and chairman. Photo: ReutersPremium
The company’s board on Thursday appointed Ajay Singh as its managing director and chairman. Photo: Reuters

Mumbai: Low-cost carrier SpiceJet Ltd is looking to raise an additional 300 crore to expand its fleet size to 45-50 aircraft by the end of March 2016, the company has informed the BSE on Thursday. The carrier had come close to shutting down in late last year when it did not have cash to even pay its creditors.

The company’s board on Thursday announced that Ajay Singh has been designated as its managing director and chairman. “Mr. Singh will not draw any remuneration for the executive functions to be performed by him," the firm said in the filing.

Singh, a co-founder of SpiceJet who had exited the airline in 2010, is back in control after buying out the entire 58.46% stake of Kalanithi Maran and Kal Airways Pvt. Ltd on 23 February. Singh promised to invest at least 1,400 crore in the airline as a lifeline to the cash-strapped carrier.

However, the new promoter of SpiceJet may infuse less money into the airline than he had earlier planned because of better-than-anticipated cash flows from operations, Mint reported on 24 April. India’s second largest low-fare airline was expected to get an infusion of 500 crore in April to recapitalize the company and fund expansion.

The airline is in talks with private equity firms and banks to raise $150 million (over 900 crore) in debt or equity for working capital and also to repay its dues, a 19 May report of Business Standard said.

In its efforts to turn around the company, the new management has taken several steps such as settling disputes with its aircraft lessors, which had filed winding up petitions against the company. On 1 April, the company in a BSE filing said that it has settled all disputes with its aircraft lessors and is taking seven more planes on lease to meet its flight plans for the summer schedule that started on 29 March.

The firm is also in talks with Canadian plane maker Bombardier to reduce the maintenance cost of its fleet.

Shares of SpiceJet closed the day at 17.80, down by 0.56% on the BSE, while the benchmark Sensex closed at 27,809.35 points, down by 0.1%.

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ABOUT THE AUTHOR
Swaraj Singh Dhanjal
" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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Published: 21 May 2015, 01:58 PM IST
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