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SpiceJet auditors warn of substantial erosion of SpiceJet's net worth

7-Feb-2012 9:56 AM

SpiceJet's auditors, S R Batlibol & Associates, as part of the carrier's financial results for the three months ended 31-Dec-2011, stated (06-Feb-2012) as at 31-Dec-2011, "the company’s accumulated losses of Rs 1078 crore has substantially eroded the net worth of the company, indicating the existence of a material uncertainty that may cast doubt about the company’s ability to continue as going concern”. According to reports by local news sources, including Business Standard, Live Mint and Indian Express, the carrier's net worth reportedly stood at INR238.9 million (USD4.9 million) as at 31-Dec-2011, marking the first time the carrier has been in negative territory since Kalanithi Maran-promoted Sun Group took over its management. The airline has, however, noted its net worth has increased in the last quarter after its promoters infused further funds into the carrier. “In the third quarter of the current fiscal, our promoter infused Rs 131 crore in the company. Even if you deduct the losses made during the quarter, we have got over Rs 90 crore. Money is not an issue for us,” CEO Neil Mills said. Mr Mills added the company has sufficient and is paying all bills on time.