SpiceJet gets govt nod for revival plan; new promoters may acquire 58% stake

SpiceJet, the home-grown budget carrier, on Friday said the government has approved its 'reconstruction and revival' plan submitted to the Civil Aviation Ministry on January 15.

"The company has on January 22, 2015 received the approval of the competent authority, the Ministry of Civil Aviation, Government of India, for the 'scheme of reconstruction and revival for the takeover of ownership, management and control of SpiceJet Ltd' by Ajay Singh in accordance with the application made by the company," the airline said in a filing to the Bombay Stock Exchange (BSE) on Friday.

Last week, SpiceJet board had approved a proposal that promoter Kalanithi Maran would transfer ownership, management and control of the airline to original founder Ajay Singh as part of plans to revive the ailing carrier.

The private sector airline also submitted a "scheme of reconstruction and revival" for the takeover of ownership, management and control of the airline by the new promoters to the Civil Aviation Ministry for its approval.

"The Ministry has given its initial go ahead to the plan, and it has now been referred to Security and Exchange Board of India (Sebi) to examine whether the Rs 1,500 crore capitalisation by the new promoters in the airline triggers an open offer," official sources said.

The approval has been accorded in line with the foreign direct investment (FDI) cap for the sector, they said.

As part of the revival plan, the new promoters may acquire up to 58 per cent in the airline.

Meanwhile, DGCA on Thursday allowed SpiceJet to accept advance bookings beyond March 31.

The airline's Chief Operating Officer Sanjiv Kapoor said that the Directorate General of Civil Aviation's decision would "aid cash flow and the revival process".

DGCA had earlier restricted the budget carrier to take advance bookings only up to March 31, following financial crisis in the airline, which led to cancellation of its flights in large numbers and curtailment of operations.

The summer schedule of the airlines in the country commences from March 29 and lasts up to October end.