Kalanithi Maran may raise around R400-500 Cr from the market to retire the debt raised from banks for operational needs.

The SpiceJet promoter hinted at a few MNC banks including a European one to find investors, according to ET. It also mentioned that the promoter is willing to collateralise Sun TV shares along with real estate assets of the group.

However, Sun Group's CFO, SL Narayanan denied any such plans of the promoter.

Maran had infused R130 Cr in SpiceJet last year after subsequently increasing his stake in the company through capital infusions.

His current stake stands at around 48.59% as on June 2012 and over the past couple of years he invested more than R230 Cr in the airline after putting in another R100 Cr this year.

Earlier the airline’s management had shown a preference for a deal with foreign carrier given FDI norms are eased and during which it was reported that a few foreign PE funds had evinced interest in acquiring a stake in SpiceJet. FDI in aviation was permitted recently by the government upto 49%.

The company was also in talks with Arab carrier Emirates to offload stake in the airline after it started flying operations to Dubai this year.

After facing losses the whole of last year, SpiceJet’s profit turned positive from this year’s opening quarter. It has a long-term debt of more than R600 Cr.

The airlines space being a capital hungry segment is going through a tough phase in the light of certain issues like high crude prices, stalled reforms for FDI in the sector, increased competition and high reliance on debt among others things.

Rakesh Jhunjhunwala recently invested R7.7 Cr in SpiceJet through its arm Rare Enterprises by buying 0.52% stake.

Among peers, Kingfisher Airlines’ is an inevitable case of aggressive debt piling and improper management of the same ultimately leading to repayment problems. GoAir (which also has a debt of over R600 Cr) was planning to raise around R1100 Cr in equity to pare debt.

Last week Etihad Airways was touted to pick up stake in Jet Airways marking the first deal in the aviation post FDI (49% by a foreign carrier) opening in the sector.

The overall debt burden on the Indian airline industry stands close to $20 Bn in this fiscal.

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