IndiGo co-founder Rakesh Gangwal is in talks to buy a “sizable” stake in troubled domestic airline SpiceJet, ET Now reported on Friday, citing sources. The news sent shares of SpiceJet up as much as 20 per cent. Gangwal and his wife Shobha Gangwal hold 13.23 per cent and 2.99 per cent, respectively, in IndiGo operator InterGlobe Aviation, as of June-end, while their Chinkerpoo Family Trust holds a 13. per cent 5 stake, according to exchange data.
Cash-strapped SpiceJet, which is “struggling to stay afloat”, has been scrambling to raise funds and restore operations for about a fourth of its fleet that has been grounded amid fierce competition in the sector.
SpiceJet, whose market share slid to 4.4 per cent as of September-end from 7.3 per cent at the end of January, did not immediately respond to Reuters’ request for comment on the report. IndiGo shares were up 0.9 per cent in afternoon trading on Friday.
In February 2015, Maran and KAL Airways, his investment vehicle, transferred their 58.46 percent in SpiceJet to Singh, who took on the airline’s liabilities of around Rs 1,500 crore. As part of the agreement, Maran and KAL Airways said they paid SpiceJet Rs 679 crore for issuing warrants and preference shares. Maran alleged that the warrants and preference shares were not allotted and initiated arbitration proceedings against SpiceJet and Singh.
In July 2018, an arbitration panel rejected Maran’s claim of damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways but awarded him a refund of Rs 579 crore plus interest. SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit of the remaining sum of Rs 250 crore.
SpiceJet in September said it has completed the payment of Rs 100 crore to former promoter Kalanithi Maran’s KAL Airways. The airline noted that it had “made a payment of Rs 77.5 crore” on September 11 and the remaining payment of Rs 22.5 crore was completed on September 12.