SpiceJet rallies over 15% as ex-promoter Ajay Singh may step in to defuse crisis

NEW DELHI: SpiceJet Ltd rallied as much as 15.5 per cent in trade on Friday, after media reports suggested that former promoter Ajay Singh and two 'blue-chip' investors are said to be pumping in about Rs 1,200 crore to rescue the financially strapped airline.

"Singh, closely associated with the ruling Bharatiya Janata Party, embarked on a hectic series of meetings with aviation ministry officials in Delhi on Thursday," ET reported.

"The airline will come up with a financial plan for revival on Monday, according to the sources, with Singh and the other investors getting a stake in the airline," added the report.

At 10:50 a.m.; SpiceJet was trading 15.1 per cent higher at Rs 15.20. It hit a low of Rs 14.40 and a high of Rs 15.25 in trade today.

Ajay Singh started SpiceJet along with London-based NRI Bhupendra Kansagra in 2005. It had cash reserves of Rs 800 crore when they left the company five years later.

SpiceJet has debts of Rs 1,600 crore on December 5 which had prompted aviation regulator DGCA to put them under heightened surveillance.

Earlier, S L Narayanan, CFO of SpiceJet's parent company Sun Group, had told PTI, "We need some breathing time... If we get a reprieve from the banks, Mr (Kalanithi) Maran is ready to give guarantee we can restart the engine. Once the collection starts coming in, we will pay (the dues)."

Maran has already invested around Rs 820 crore in the last three years and he has invested whenever the airline has needed money, he had said.