MOSCO: SpiceJet jumped over 9 per cent in morning trade that JPMorgan Chase is in advanced talks to partner with the carrier’s co-founder for a planned $200 million investment.
Ajay Singh, who helped set up the low-cost airline in 2005, is leading a rescue plan for SpiceJet and has met with aviation ministry officials to discuss a revival plan. He is looking to partner some US-based private equity investors to help fund the airline, a government official told.
Sun Group, the majority owner of SpiceJet, had earlier said it cannot afford a bail out after sinking $400 million since buying it in 2010.
SpiceJet shares are up over 20 per cent in the past week on hopes of fund infusion. India’s second largest budget carrier is in urgent need of Rs 2,000 crore to survive, analysts say.
December has been a volatile month for SpiceJet shares and market analyst Ambareesh Baliga told that the stock was a speculative bet and not an investment bet.
Meanwhile, Jet Airways also traded higher, rising nearly 2 per cent to Rs 393. The company’s shares have risen over 50 per cent in the last month on falling crude prices and expectations that the carrier will benefit from SpiceJet’s woes.
The aviation ministry has been considering both upper and lower limits for prices after receiving complaints from customers, who have reported sharp increases, particularly for last-minute sales.
