GURUGRAM- Rakesh Gangwal, the co-founder and former promoter of IndiGo (6E), is reportedly in advanced talks to acquire a significant stake in the budget airline SpiceJet (SG), according to a report by ET Now.
As of the end of June, Rakesh Gangwal and his wife, Shobha Gangwal, held stakes of 13.23% and 2.99% in IndiGo’s operating company, InterGlobe Aviation, respectively. The Chinkerpoo Family Trust, associated with them, also holds a 13.5% stake, based on exchange data cited by ET.
IndiGo Co-Founder SpiceJet Stake
SpiceJet is currently facing financial challenges and actively seeking funds to address a cash shortage. Earlier this year, the airline came under “enhanced surveillance” by the aviation regulator.
SpiceJet has been contending with several lessors seeking to repossess leased aircraft, with some of these cases being resolved by the airline. Approximately one-quarter of its fleet remains grounded due to intense competition within the aviation industry.
Recently, SpiceJet issued more than 4.81 crore equity shares through a preferential allotment to nine of its aircraft lessors, settling outstanding dues amounting to Rs 231 crore.
Additionally, the airline is engaged in advanced negotiations with lessor Celestial Aviation to reach a settlement, a matter that has been disclosed to the insolvency tribunal, NCLT.
Celestial Aviation Services has claimed a default of $29.9 million for nine aircraft, making it the fifth lessor to approach NCLT to seek resolution with SpiceJet. Other lessors, including Willis Lease Finance, Aircastle, and Wilmington, have also initiated legal actions to commence insolvency proceedings against SpiceJet before the NCLT.
Legal Concerns
On September 5, NCLT suggested that SpiceJet should address the concerns of lessors who sought insolvency proceedings, coinciding with the airline’s offer of shares to nine aircraft lessors to settle outstanding dues.
In its most recent quarterly report for June, SpiceJet reported a consolidated net profit of Rs 197 crore, marking a significant improvement compared to the net loss of Rs 783 crore in the same period of the previous year.
Following reports of Rakesh Gangwal’s potential stake acquisition, SpiceJet’s stock saw a surge, reaching as high as 20% before closing the day with an 18% gain.
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