With Ajay Singh in pic, SpiceJet hopes to tap foreign funds

Even as SpiceJet founder Ajay Singh is almost certainly using his contacts in the Narendra Modi government to revive the flagging airline, reports today said he and the airline are in talks with a couple of US private equity firms for an infusion of funds.

SpiceJet is hopeful that they will infuse money into the airline within the next month and half, according to the reports, which add that the unnamed PE firms are conducting a due diligence exercise on the airline.

This is not surprising as SpiceJet stubbornly refuses to go the Kingfisher way, and the airline's management is seeking to buy time from the civil aviation ministry.

After a brief hiatus when most of its aircraft were grounded because fuel suppliers refused to extend its credit, SpiceJet is currently operating 230 flights a day - as compared to 345 flights it operated in July 2014.

While lessors of SpiceJet have in panic taken back some aircraft, once fresh investors come in and take charge, they are likely to relent and return the planes.

SpiceJet also has good flying slots, airport space and employees - pilots, crew, engineering staff - are all in place. It is not in "as bad a shape as Kingfisher" when that went under. It might have lost some credibility in the last month or so but nothing that can't be salvaged.

Shares of Spicejet Ltd surged 4 per cent to Rs19 in morning trade on the Bombay Stock Exchange after the news broke, combined with reports of Ajay Singh's efforts to revive the airline currently owned by Dayananidhi Maran's Sun Group.