AJAY SINGH’S SPICEJET GETS $28-MN FUNDING FOR DAILY OPS

NEW DELHI: Budget car rier SpiceJet, which is in the midst of a turnaround after co-founder Ajay Singh picked up a majority stake in the airline, has secured an interim funding of $28 million (`174 crore).

“The airline has obtained interim funding of $28 million for enabling it to achieve healthy operations and revive the cash flows,” SpiceJet said in a February 19 communication to the aviation ministry, accessed by HT.

The airline said the first capital injection of ` 400 crore would be undertaken with the issuance of cumulative redeemable preference shares once regulatory approvals were obtained.

Giving an update on its operations and payments made, the airline said there was no disruption in supplies of jet fuel with procurement being made on a “100% advance paid basis”. It is also making “100% of the daily billing of private airport operators” in most cases.

According to the payment agreement with the Airports Authority of I ndia ( AAI), SpiceJet paid ` 25 lakh daily to AAI in January 2015. From February 1-16, daily payments of ` 50 lakh were made and with effect from February 17, it had been paying ` 75 lakh per day.

The airline has cleared all employee and service tax dues till January 31 and is making a daily payment of ` 50 lakh to tax department for arrears relating to tax deducted at source. It said it would clear all pending dues once it receives ` 400 crore.

“SpiceJet looks secure under Ajay Singh. Its operations have completely stabilised and the transformation has begun,” aviation expert Subhash Goyal said.