SpiceJet's chairman Ajay Singh on Thursday said the airline is too small to bid for Jet Airways. He backed his claim by stating Jet's liabilities of over Rs 25,000 crore.
In an interview to CNBC-TV18, Singh said, the deterrents are exactly what they were a few weeks ago when we were first approached to participate in this bidding process -- liabilities.
He said, "In our opinion, Jet's liabilities are close to, or, in excess of Rs 25,000 crore."
However, banking sources told CNBC-TV18 the liability figures provided by Ajay Singh were an 'overstatement' and 'incorrect'.
On April 21,
T Jet's gross loans and unpaid interest towards its domestic and international lenders may amount to Rs 11, 261 crore. It said this included Rs 7,251 crore to nine domestic banks including State Bank of India (SBI). he Hindu BusinessLine reported
Singh claimed the figure of Rs 25,000 crore on the back of some vendor liabilities. He said, "Our estimate was that there were vendor liabilities which were close to Rs 14000 crore and there are advances from the sale of seats, which will have to be paid back to customers and those are probably about Rs 2500 crore as well."
On April 18, Jet Airways
suspended all operations with immediate effect as banks were unwilling to infuse funds. The airline had asked for an emergency funding of Rs 400 crore to stay afloat as Rs 1,500 crore offered by banks as an interim measure was nowhere in sight.
SpiceJet commenced its operations in 2005 and is known to be a no-frills airline that does not offer passengers business class seats, plush lounges, seats with ample legroom, frequent flyer miles, in-flight entertainment and tickets inclusive of meals. In short, it offers a travel experience radically different from full-service carriers such as Vistara and Air India, which feature all the above-mentioned facilities in their operations, though some like Vistara have tweaked that model.
Read more stories from CNBC-TV18’s exclusive interview with SpiceJet chairman Ajay Singh