Auditors cast doubts on SpiceJet's ability to stay afloat

Mumbai: Auditors of low-cost airline SpiceJet have cast doubts over the company's ability to stay afloat as its accumulated losses have eroded its net worth.
In a limited review report to SpiceJet directors, S R Batliboi & Associates said accumulated losses of Rs1,077.81 crore as of December 31 have "substantially" eroded the company's net worth, raising questions about the company's ability to continue as a "going concern".
SpiceJet, whose net worth stood atRs315.83 crore in December, has a market-cap of Rs1,108 crore. Shares in SpiceJet closed at Rs24.60, down 0.40% on BSE on Monday. The Kalanithi Maran-owned airline on Monday reported a loss ofRs39.3 crore for the three months to December as against a profit ofRs94.44 crore a year ago.
The third quarter is traditionally the strongest for airlines in India. The auditors said the losses would have gone up further had SpiceJet made a provision for interest relating to earlier years on the outstanding inter-corporate deposits which the Gurgaon-based airline has under-reported.
07/02/12 Manisha Singhal/Economic Times

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Categories: spicejet Feb 2012