Sun Group Chief Financial Officer told CNBC-TV18 in an interview that the warrant issue was aimed at arresting the erosion in the company’s networth. Losses at SpiceJet have been mounting, as the company grapples with high fuel price and fierce competition.
The company has reported a net loss of Rs 508 crore for the first half of this financial year, on the back of a Rs 191-crore loss for 2012-13. The company’s networth as on September 30, 2013 is negative Rs 603 crore.
Over the last year, SpiceJet shares have declined 57 percent, and those of rival Jet Airways have fallen 53 percent. Last year too, the company’s promoters had infused funds through warrants, and in December 2013, raised their stake by 2.8 percentage points to over 53 percent by converting Rs 54 crore worth of warrants into shares.
Competition in Indian skies is expected to intensify as Air Asia and Tata SIA commence operations in the coming months. There are media reports that SpiceJet is in talks with strategic investors to sell a minority stake and raise equity capital. However, Narayanan refused to comment on this aspect. Read more..
Source: Automobile News
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