SpiceJet’s CEO Initiates Talks to Secure $100 Million Funding Amid Legal Challenges

Ajay Singh, the CEO of SpiceJet, is reportedly in the early stages of negotiations to secure funding of up to $100 million, according to sources close to the matter cited by India’s MoneyControl outlet. The discussions are said to involve various global funds, with the focus on structuring a potential credit transaction and determining pricing terms.

Despite facing numerous challenges, including active lawsuits and insolvency petitions, SpiceJet has demonstrated resilience, reporting a net profit of INR 2.0456 billion rupees (USD 24.55 million) for the quarter ending June 30, 2023. The airline’s improved cash flows and return to profitability have strengthened its financial position, enabling it to consider options for raising additional funds. The recent market exit of rival airline Go First has also contributed positively to SpiceJet’s performance.

In mid-2023, Ajay Singh committed to infusing INR 5 billion (USD 60 million) into SpiceJet through fresh equity shares or convertible instruments. This investment was strategically designed to facilitate the airline’s access to an additional INR 2.06 billion (USD 25 million) under the Indian government’s Emergency Credit Line Guarantee Scheme. Despite these efforts, SpiceJet continues to face financial pressures, partly attributed to ongoing legal disputes, including a substantial order to pay INR 3.8 billion (USD 45.5 million) to former majority owner Kalanithi Maran.

SpiceJet has not responded to requests for comment on the reported funding talks. The potential infusion of $100 million could further bolster the airline’s financial position and support its ongoing efforts to navigate the complex legal landscape, ensuring its continued operations in the competitive Indian aviation market.