SpiceJet Ltd is in “exploratory and preliminary stage” talks with investors about raising fresh capital that it needs to return to profitability, the budget airline said in a regulatory filing on Monday.
SpiceJet, which this month reported its fifth consecutive quarter of losses, has been trying to raise fresh capital for much of this year. It said in May it was in “advanced” talks for capital infusion but no deal materialised.
“We wish to clarify that a few parties have approached us and evinced interest in making investments into SpiceJet Limited (the “Company”), as the Company has been exploring various options for raising fresh capital,” the airline said.
The talks are at an early stage so it would be improper to comment on the specifics of any possible stake sale, it said.
The airline, controlled by billionaire Kalanithi Maran’s Sun Group, has been losing money as competition for passengers forces fares down and, like rivals, it battles with some of the highest operating costs in the aviation industry.
It has been seen as a potential target by foreign airlines eager for exposure to one of the world’s fastest growing aviation markets after rules were eased in 2012 to allow foreign carriers to buy up to 49 percent in local airlines.
SpiceJet chief operating officer Sanjiv Kapoor said at a press briefing last week the airline would not be able to return to profitability without a capital injection.
“Until we recapitalise the airline, we will not have the full ability to take out costs,” he said. “Recapitalisation is needed.”
Despite measures to cut costs and raise revenues, Kapoor said the airline would need between 9 and 12 months following recapitalisation before it could report a profit.