SpiceJet shares plunge as airline asks for govt help

Aviation consultancy CAPA estimates SpiceJet needs at least $300 million to $350 million of investment if it is to be able to recover, up from $250 million in March.


SpiceJet shares plunged as much as 17 per cent on Tuesday as the cash-strapped airline raced against time to convince the government to help it remain in the air.

SpiceJet executives were set to meet government officials for another round of talks after a deadline set by regulators for the budget carrier to set out a plan for paying its dues to airline authorities and fuel suppliers expired on Sunday.
SpiceJet Chief Operating Officer Sanjiv Kapoor said on Monday the airline had not yet submitted a financial plan to the regulators. A spokesman for the airline said he could not comment on the talks on Tuesday.
The pressure on the embattled airline, which has been making losses since last year, to find the fresh capital it says it needs has increased this month.
"It is a typical squeeze of funds which will threaten working capital for Spicejet," said Deven Choksey, managing director of brokerage K.R. Choksey Securities.
"Given the experience with Kingfisher, probably efforts would be made by government and stakeholders to make sure Spicejet doesn't go the Kingfisher way," he said.
Choksey was referring to Kingfisher Airlines, which has not flown for more than two years after racking up $1.4 billion of debt from a consortium of banks, mostly state-owned.
http://www.thehindubusinessline.com/industry-and-economy/logistics/spicejet-shares-plunge-as-airline-asks-for-govt-help/article6697277.ece

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