30/01/2015 11:30 AM IST | Updated 15/07/2016 8:24 AM IST

Ajay Singh To Buy Out Maran, Kal Air Stakes In SpiceJet

Bloomberg via Getty Images
A visitor walks past an advertisement for SpiceJet Ltd. at the India Aviation 2014 air show held at the Begumpet Airport in Hyderabad, India, on Thursday, March 13, 2014. The air show takes place from March 12-16. Photographer: Dhiraj Singh/Bloomberg via Getty Images

Troubled budget airline SpiceJet Ltd. said today that founder Ajay Singh will be buying out the entire stake of billionnaire Kalanithi Maran, as part of a rescue plan.

The board of the company approved sale of the 58.46 percent stake held by Maran and his company, the Sun Group. All representatives of Sun, including Maran, have tendered their resignations from the board. The registered office of the airline will shift to Delhi from Chennai.

The board also decided to allot 37 lakh non-convertible preference shares to Maran and his group firms, at Rs 1,000 per share. Preference shares owners do not have voting rights, and are paid first if the company goes bankrupt.

The board also decided to increase authorized share capital of the company, and plans to raise Rs 1,500 crore through various securities, including a mix of equity and preference shares.

Singh had earlier thrown a lifeline to the airline he had helped found, after it had struggled to pay salaries, and bills. Its planes were grounded for several days in December. Singh has promised to put in Rs 1,500 crore in the airline in tranches, and the next infusion of Rs 400 crore is expected on February 15 as per a plan agreed by the company and the Ministry of Civil Aviation.