The SpiceJet share price surged in trade today amid a report that the Ajay Singh-owned carrier is planning to buy as much as 40 aircraft of Jet Airways from lessors.
SpiceJet share price gained up to 14.24% to 104.70 compared to the previous close of 91.65 in trade today.
SpiceJet share price has been gaining for the last four days and risen 27.02% during the same period.
SpiceJet share price opened 2.02% higher at 93.50 on BSE today. The stock has fallen 25% during the last one year and gained 11% since the beginning of this year.
Jet Airways has been facing financial distress for long due to grounding of over 40 of its aircraft till now leading to cancellation of its flights.
State Bank of India is the lead lender of a consortium that has extended loans to Jet Airways, which has been grappling with financial woes and is looking to rejig debt as well as raise funds.
On February 14, Jet Airways' board had approved a Bank-Led Provisional Resolution Plan (BLPRP), whereby lenders would become the largest shareholders in the airline. Its shareholders have also approved conversion of loan into shares and other proposals during the extraordinary general meeting on February 21.
The Bank-Led Resolution Plan (BLRP) by lenders estimated a funding gap of Rs 8,500 crore (including proposed repayment of aircraft debt of Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale and lease back of aircraft, among other things.
Shareholders of Jet Airways had approved conversion of loan into shares and other proposals during the extraordinary general meeting (EGM) last week.
As on September 30, 2018, Jet Airways had gross debt of Rs 8,411 crore (including terms loans from banks and dues to lessors for aircraft lease), as against Rs 8,403 crore as on March 31, 2018. The company has large repayments of Rs 1,700 crore due over December 2018 to March 2019, Rs 2,444.5 crore in FY2020 and Rs 2,167.9 crore in FY2021.
Jet defaulted in servicing its loan obligations on December 31 2018 and the 90-day window before its loans are dubbed non-performing assets (NPA) ends on 31 March 2019. The company has clocked losses in the last four consecutive quarters.
(Edited by Aseem Thapliyal)