Kalanithi Maran, promoter of media group Sun TV Network Ltd, will increase his stake in the low-cost airline SpiceJet Ltd to 43% by October, in the process bringing in much-needed funds to the tune of about Rs.130 crore as per a report by Tarun Shukla in Mint.

The infusion and stake increase will happen through the issue of convertible preference shares at a premium of 50% to the current share price of Rs.24, according to Neil Mills, SpiceJet’s chief executive officer.

“It shows the promoter has confidence in the business case,” added Mills, referring to the airline’s fast expanding footprint in the so-called regional market, involving flights to and from tier II and III cities across India.

Ahead of its 2010 sale to Maran’s KAL Airways Pvt. Ltd, the airline tried to raise money through a preferential issue of shares, and, after that failed, through a sale of shares to private equity investors and an issue of global depository receipts.

Since taking over the airline, Maran has pledged some of the shares he acquired as part of an effort to raise money to fund operations even as losses have increased.

SpiceJet registered a profit of Rs.101.16 crore in 2010-11, the only listed Indian carrier to do so that fiscal year, but has since lost money, owing to high fuel prices and growing competition. The company lost Rs.71.96 crore in the three months to 30 June compared with a net profit of Rs.55.21 crore in the year-ago period.

The state of the business has also affected the fund-raising plans of other airlines.

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