Promoters infuse Rs 131cr in SpiceJet

No Comments
Updated: Wed, 08 Feb 2012 14:22:10 GMT | By Lalatendu Mishra, Mail Today

Marans infuse Rs 131cr in SpiceJet

Promoters of SpiceJet disagree with audiors that the financial health of the low-cost airline is in danger.

The SpiceJet stock in early trade on Tuesday plunged 2.44 per cent after its auditors reportedly raised concern over the low cost airline’s financial health.

According to reports, the accumulated loss of the airline to the tune of Rs.1,078 crore as on December 31, 2011, has eroded the company’s net worth and doubts had been raised on the carrier’s ability to continue as a going concern.

Soon after the SpiceJet stock plunged, its promoters said they had infused additional equity of Rs.131 crore and they also rubbished all concerns.

“With great respect, we wish to state that there is a misinterpretation of facts. The fact is that the net worth of SpiceJet Ltd as on December 31, 2011, was almost Rs.100 crore. It is worth to mention that an equity infusion of Rs.131 crore was done by the promoters in October 2011. The net worth of the company has actually improved,” Neil Mills, chief executive officer, SpiceJet told Mail Today.

“The networth of Spice-Jet has actually risen tenfold. SpiceJet net worth was just about Rs.9.13 crore at the end of September, 2011 quarter and it has grown to almost Rs.95.57 crore on the back equity infusion, which was done by promoters. So, it is not correct to say that the net worth has been eroded,” said SL Narayanan, Group CFO, Sun Group, the promoter of SpiceJet.

However, experts said that the promoters have to pump in more. According to estimates by Centre for Asia Pacific Aviation (CAPA) SpiceJet is expected to post a full year loss of Rs.500-600 crore. “We expect significant pressure to finance these losses and the airline has to make possible provisions for next fiscal,” said Kapil Kaul, CEO South Asia, CAPA.