New Delhi, Jan 21: The revival plan of cash-strapped airline SpiceJet was approved by the civil aviation ministry on Wednesday.
According to a ministry official, the revival plan which includes the influx of fresh funds to restore the airline's operations under the new promoters was approved by the ministry.
The official further said that the ministry has forwarded the revival plan to market regulator Securities and Exchange Board of India (SEBI) which will take a call on whether to exempt the airline from going ahead with transfer of ownership.
Under the current regulations any transaction of more than 25 percent in a listed company triggers an open offer.
The airline has asked the market regulator to exempt it from the regulation so that it can go ahead with the planned transaction that is expected to restore its financial health and operations.
On Jan 15, the airline said that its current promoter Kalanithi Maran will off-load his stake in the company to new promoter Ajay Singh after regulatory clearances.
A regulatory filing was made in this regard at the Bombay Stock Exchange (BSE). However, the filing did not disclose any financial details.
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 Kalanithi Maran.
Currently, Maran, together with his KAL Airways, holds 53.5 percent stake in SpiceJet, while Singh has a 4.5 percent stake. Maran acquired SpiceJet for close to Rs.750 crore.
In December, Maran made it clear that no fresh bail-out package could be made for the airline in which nearly $400 million or Rs.2,500 crore has been invested in since 2010.
The airline is hopeful that with the new promoter at the helm, fresh funds will be infused to strengthen its operations.
The company had also made it apparent to the ministry that new promoter Singh -- with his revival plan -- will help it tide over the current financial turmoil.
In another development the company's shares at the BSE slumped by 8.26 percent at Rs.21.10 per equity share, after reports emerged that a private airport operator has asked the airline to immediately pay dues.