India's SpiceJet Close To Sealing Investment Deal

India's SpiceJet Close To Sealing Investment Deal

Spicejet has reportedly reached an agreement with an as yet unnamed strategic Investor over a possible buy in to the struggling budget carrier. Indian media have been awash with reports the Airline could finalize the deal as early as next month.

Speaking last week during a press conference covering the budget carrier's second quarter numbers, SpiceJet Chief Operating Officer Sanjiv Kapoor said the loss making carrier's quest for a strategic Investor had yielded responses from several interested parties but declined to specify who they were.

Amid Auditors warning the carrier's future was in danger after it posted a INR3.1billion USD50.3million loss,Kapoor said SpiceJet's would only be able to return to profitability 9-12 months after recapitalisation.CAPA has speculated that Spicejet would require close to USD250million in funding to complete its ongoing turnaround exercise.

Until we are able to recapitalise, we will not have the ability to take out costs. The recapitalisation activity is ongoing,he said.

Despite the loss, Kapoor was adamant the carrier's restructuring programme was beginning to bear fruit.

The operating performance improvement in Q2 is real. It is an actual genuine operating performance improvement; it is not impacted by extraordinary revenues or others. We are making significant progress towards a turnaround,he told India's The Hindu newspaper.


Auditors raise doubts about SpiceJet's going concern status

Spicejet Auditors SR Batliboi & Associates have cast doubt on the Airline's ability to remain a going concern after it posted a INR3.1billion loss for the quarter ended September 30, 2014.

We draw attention to Note 7 of the Statement which indicates that the Company has incurred a net loss of INR3.104billion during the quarter ended September 30, 2014, and as of that date, the Company's total liabilities exceed its total assets by INR14.5973billion
Mysore, India, to lose scheduled services from October 25

24OCT2014no comments or reactions
Spicejet will discontinue its Mysore services with effect from October 25 citing inadequate demand for its flights to Bangalore Int'l and Chennai. The move will leave the south-western Indian town without scheduled operations for the second time since its refurbishment and reopening in 2010.

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Mohini Porwal [ B Sc]
Trainee News Editor
Indian Aviation News Editor