Image: Amit Dave/Reuters
A recent 25-page long judgement by the Delhi High Court states that Ajay Singh, the present owner of SpiceJet, had bought majority stake in the budget airline in January 2015 from Chennai-based billionaire and chairman of Sun Group, Kalanithi Maran, for Rs 2.
“After discussions and with a view to restore operations and regain the company’s market position, the petitioners (Kalanithi Maran and KAL Airways Pvt. Ltd) had agreed to transfer their shares and the appellant (Ajay Singh) agreed to acquire them. The Sale Purchase Agreement (SPA) was executed between both the petitioners and the appellants on 29.01.2015.
By the SPA, the appellant had acquired 35,04,28,753 equity shares in the company i.e. 58.46 percent share capital of both petitioners, i.e. Kalanithi Maran and KAL Airways Pvt. Ltd. in SpiceJet by paying Rs 2,” read a portion of the judgement, which has directed Singh to pay Maran Rs 579 crore in relation to a share transfer dispute between the two.
The dispute relates to the SPA that was executed in January 2015 between the two parties. Maran had filed a court case against Singh and SpiceJet alleging that he and his airline company KAL Airways were not issued stock warrants and convertible redeemable preference shares as part of the SPA.
Ajay Singh took over the reins of SpiceJet at a time when the airline was on the brink of collapse. He bought a loss making airline that had debt and liabilities in excess of Rs 3,500 crore on its books. Besides, many of SpiceJet’s aircraft lessors had started to take back their aircraft, which saw the airline’s fleet shrink from 42 to 16 by December 2015.
“Each share of the company was around Rs 16.30 at the time of entering into the SPA (the value of the said equity shares was about Rs 765 crores at that time) subject to the terms that the payments also included the adjustments of the advances monies provided to SpiceJet by the Petitioner and KAL Airways Pvt Ltd ..….. This position was not disputed by the appellant (Ajay Singh), before the learned single judge, as noted in the impugned judgment,” the judgement went on to read.
After taking over the reins of SpiceJet, Singh had pumped in Rs 850 crore into the airline, raising the money through a combination of low-cost debt and supplier credits. Since then, SpiceJet has scripted a phenomenal turnaround story. The airline has reported profit over last nine consecutive quarters. Its profit in fiscal 2017 stood at Rs 430.7 crore. On Thursday, the airline's share price was trading at Rs 125.50 apiece, up a whopping 861 percent since Singh took over.