By IANS,
New Delhi : Budget carrier Spicejet Friday said its promoter Kalanidhi Maran will infuse Rs.100 crore into the passenger carrier in lieu of five percent equity or additional 42.9 million shares.
“This decision shows the confidence of the promoters in the company and its viability. The board has taken this decision today and will allot 42.9 million preferential shares to the promoters,” SpiceJet chief executive Neil Mills told IANS.
“This is the second time in eight months when the promoters have infused equity. Last September, we received Rs.130 crore and five percent of the equity shares were allotted to the promoters.”
According to Mills, with the new equity shares, the overall holding of the promoters will go up to 48.6 percent.
He said that the fresh funds would be utilised by the company in its day to day activities and for general expenses.
“This (fund) will go into the normal working capital and for general growth. Our debts are affordable, we are paying the oil companies, salaries and we are not behind any schedule. We will get through these tough times,” Mills said.
Fresh funds should come as a relief to the airline, as the whole sector is facing tough operating conditions like high interest and fuel costs.
The budget carrier had Feb 6 reported a net loss of Rs.39.26 crore for the quarter ended Dec 31 from a net profit of Rs.94.44 crore in the like period of 2010-11.
The airline had blamed escalating ATF (aviation turbine fuel) prices and abnormal increase in the US dollar rates as the reason for the net loss in the quarter ended Dec 31, 2011.
The company’s auditors in a review report said that accumulated losses has eroded net worth of the company.
“As at Dec, 31, 2011, the company’s accumulated losses of Rs.107,781.3 lakh has substantially eroded the net worth of the company, indicating the existence of a material uncertainty that may cast doubt about the company’s ability to continue as a going concern,” the auditors said.
The company had also reported a consolidated net loss for the fiscal at Rs.356.59 from a net profit of Rs.159.78 crore in the like period of 2010-11.
Sun TV owner Maran became the chairman of Gurgaon-based SpcieJet in November 2010 after he bought the stake of US-based investor Wilbur Ross.