Mumbai, Feb 20:
Budget passenger carrier SpiceJet’s scrip soared nearly 18 percent in the intra-day trade Friday, after the airline informed that Competition Commission of India (CCI) has cleared the proposed takeover of the company by Ajay Singh.
The airline scrip on the Bombay Stock Exchange (BSE) soared to an intra-day high of Rs.23.50, up 17.79 percent from its previous close of Rs.19.95 per equity share.
The airline’s scrip was trading at Rs.23.25 up 16.79 percent in the afternoon trade session.
The upsurge in the company’s stocks came after it informed the BSE in a regulatory filing that the CCI had cleared the proposed take over of the airline by Singh.
On Jan 15, the airline’s board had approved the plans to allow Kalanithi Maran together with his KAL Airways to off-load their stake in the company to Singh after regulatory clearances.
Maran together with his KAL Airways, held 53.5 percent stake in SpiceJet, while Singh had a 4.5 percent stake. Maran acquired SpiceJet for close to Rs.750 crore.
In December 2014, Maran made it clear that no fresh bailout package could be put together for the airline in which nearly $400 million or Rs.2,500 crore has been invested since 2010.
The CCI clearance assumes significance as it now allows the proposed combination and acquisition of entire shareholding of Maran and Kal Airways by Singh.
It is expected that after the proposed takeover fresh funds will be induced in the cash-strapped airline.
This is Singh’s second innings with the airlines which he co-founded with Bhupendra Kansagra in 2005. However, he had sold his stake along with Kansagra and assets buyout specialist Wilbur Ross in 2010 to Sun Group’s Maran.
Last month, the civil aviation ministry had approved the company’s revival plan which entailed the takeover by Singh and allowed the budget passenger carrier to open bookings for flights in the upcoming summer schedule.
The revival plan included the proposed takeover by Singh and subsequent influx of fresh funds to restore the airline’s operations.
The airline also plans to raise funds up to Rs.1,500 crore through issue of securities. IANS