Aid for SpiceJet: Mumbai-based Harihara Mahapatra, Preeti Mahapatra to invest Rs 1,100 cr, to hold over 21% stake

Mumbai-based businessman Harihara Mahapatra and his wife Preeti have announced a substantial investment of Rs 1,100 crore in cash-strapped SpiceJet. In an exchange filing on Tuesday, the airline said Harihara Mahapatra and Preeti Mahapatra, who are promoters of the Mumbai-based group Mahapatra Universal Limited, will jointly hold 21.98 per cent (1.99 per cent and 19.99 per cent, respectively,) stake in the airline. 

The news came hours after the low-cost airline expressed its interest in acquiring Go First, which is undergoing insolvency resolution under the direction of the National Company Law Tribunal. The airline said it will submit an offer to Resolution Professional post diligence. 

“Please note that SpiceJet Ltd…has expressed interest with the Resolution Professional of Go First and wish to submit an offer post diligence, with a view to creating a strong and viable airline in a possible combination with SpiceJet,” SpiceJet said in the filing.

Go First, grounded since May due to financial turmoil exacerbated by Pratt & Whitney engine issues, possesses a fleet of 54 Airbus SE A320neos.

In a statement in the Annual Report of FY23, Singh said: "The Board of Directors of the Company, recently approved a strategic move to raise fresh capital, totalling over Rs 2,240 crore (approximately USD 270 million). This initiative involves the issuance of equity shares to Financial Institutions, FIIs, HNIs, and private investors, aiming to fortify our airline’s financial strength and accelerate our growth trajectory. I am proud to share that prominent investors, including Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Group, Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund, and others, will be part of this landmark initiative by subscribing to equity shares and equity warrants."

"This is a significant fund raise that will empower SpiceJet to execute ambitious expansion plans and bolster its operational capabilities. It will strengthen our financial position, settle outstanding issues, help us enhance our product presence and expand our market reach," Singh added.

He further added that Rs 200 crore has been infused in the company. It will be further infusing about Rs 300 crore into the company. With this equity contribution, the Company is entitled to additional credit facilities of Rs 200 crore under the emergency credit line guarantee scheme. 

Last week, SpiceJet had announced that several high-net individuals will invest over Rs 2,000 crore in it through 130 million convertible warrants and 320.8 million fresh equity shares, which will slash CMD Ajay Singh’s current shareholding in the airline from 56.49 per cent to at least 38.55 per cent, the Economic Times reported.

Hariahara Mahapatra and his wife Preeti are promoters of Mahapatra Universal Limited, which is a global enterprise with five subsidiaries across eleven verticals. 

The company has a presence in a variety of sectors, including manufacturing, engineering, infrastructure, information & technology, consumer and retail, financial services, healthcare, sports, media and entertainment.

Harihara holds an MBA degree and has spent nearly 16 years building and leading investments as an entrepreneur from manufacturing to financial services.

Preeti Mahapatra holds a master’s degree in International Business (Finance) and Export Management and has successfully launched international brands in European, Asian and Middle Eastern markets.

In 2016, Preeti contested the election for the Rajya Sabha from the state of Uttar Pradesh on a BJP ticket and was pitted against Congress leader Kapil Sibal. She lost in the polls.

Also read: SpiceJet to raise Rs 2,241 crore in two tranches to acquire Go First: Report

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