SpiceJet board gives nod to raise around $300M; Kalanithi Maran steps down from board

The country's second-largest budget carrier is to get a fresh infusion of a little over Rs 1,875 crore ($300 million) from new as well as outgoing promoter Kalanithi Maran. Maran, who has stepped down from the board and is selling his entire stake to Ajay Singh, is to subscribe to fresh redeemable preference shares.

Maran, who is also the promoter of South-based media behemoth Sun Group, is selling his entire 58.46 per cent stake in SpiceJet to the company's co-founder and former co-promoter Singh. Based on the current market price this would mean Maran getting around Rs 700 crore.

In a parallel deal, he would plough back over half of this into the firm through subscription to fresh securities.

SpiceJet's board had decided to allot up to 3.75 million cumulative redeemable preference shares to Maran for Rs 1,000 each aggregating to Rs 375 crore ($60 million).

In addition, the board has approved issue of fresh securities to raise as much as Rs 1,500 crore ($243 million).

The firm said as part of the wider change in ownership, Maran, his wife Kavery and another representative of Sun Group, S Natrajhen have resigned from the company's board.

Further, the registered office of the company is to shift back from Tamil Nadu to Delhi. This was moved after Maran got ownership of SpiceJet a few years ago.

Maran had acquired majority stake in SpiceJet over a period of time starting with a significant minority stake in mid-2010 for Rs 750 crore. He had later pumped in more cash to hike its stake.

Singh, who, along with NRI Bhupendra Kansagra, had started SpiceJet in 2005 and exited the company in 2010. He is now 

acquiring a controlling stake in the loss-making airline reportedly with the backing of JPMorgan to restructure and revive the airline.

SpiceJet is the second-largest budget carrier in the country behind IndiGo and overall the fourth-largest carrier by passenger numbers. Competition is intensifying in the domestic aviation sector with the entry of AirAsia and a separate full service airline Vistara, through a JV between Tata Sons and Singapore Airlines.

Shares of SpiceJet were trading at Rs 22.30, up 2.29 per cent on BSE at 11:50 AM in a weak Mumbai market on Friday.

(Edited by Joby Puthuparampil Johnson)

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