SpiceJet soars 20% amid reports of Indigo co-founder buying stake
SpiceJet Ltd's stock soared nearly 20% on Friday after an ET Now report revealed that IndiGo co-founder Rakesh Gangwal is in advanced discussions to acquire a stake in the troubled domestic airline company. At the end of today's trading session, the stock settled at Rs. 43.60 or 19.39% on the National Stock Exchange (NSE). As of the end of the June quarter, Gangwal held a 13.23% stake in InterGlobe Aviation Ltd., which translates to 5,10,21,132 shares.
Other reasons for the stock's upsurge
Besides this, there are other reasons as well that had a bearing on the stock's rally. Last month, SpiceJet complied with the Supreme Court's directive and repaid Rs. 12.5 crore to global investment bank Credit Suisse. To date, SpiceJet has paid a total of $8 million to Credit Suisse as per consent terms. The airline company also made a payment of Rs. 100 crore to Sun Group Chairman Kalanithi Maran's KAL Airways Pvt. Ltd to settle their dispute.
What's the dispute between Maran and SpiceJet?
The dispute between Maran and SpiceJet dates back to 2015 when SpiceJet CMD Ajay Singh acquired the airline from Maran, who had transferred his 58.46% stake for just Rs. 2. The agreement included Maran receiving redeemable warrants as compensation for his previous investments as a promoter, totaling Rs. 18 crore and equivalent to a 26% stake in SpiceJet. However, Maran did not receive either the warrants or preference shares he was entitled to. So, Maran initiated arbitration proceedings against SpiceJet.
SpiceJet's financial performance and revival plans
In the June quarter, SpiceJet posted a net profit of Rs. 205 crore, a remarkable turnaround from the Rs. 789 crore loss during the same period last year, driven by robust air travel demand. The airline also achieved the industry's highest domestic load factor of 90% in this quarter. As per the ET Now report, SpiceJet aims to revive its operations and expand its business.
