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SpiceJet Drops Most in Three Years After Report on Taxes

July 30 (Bloomberg) -- SpiceJet Ltd., an Indian budget carrier that has said debt wiped out its net worth, fell the most in almost three years after the Times of India newspaper reported the airline may have delayed tax payments.

SpiceJet fell as much as 12 percent, their biggest intraday drop since Aug. 16, 2011. They traded 11 percent down at 14.90 rupees at 10:45 a.m. in Mumbai. The airline may have failed to deposit taxes it deducted from employees to authorities, the newspaper reported, without saying where it got the information.

“These matters are privileged and cannot be discussed with the media or third parties,” the company said in an e-mailed response to questions about the report. “We are aware of our obligations.”

The carrier, majority owned by billionaire Kalanithi Maran, said in March high debt and intensifying competition made borrowing difficult, and that debt had erased its net worth. SpiceJet has fallen behind in paying dues to airports, has restructured aircraft deliveries and faces increased competition from AirAsia Bhd.’s new Indian low-cost venture.

All 37 Boeing 737 planes that SpiceJet operates are in service, the spokesman said today. All but one of its 15 Bombardier Q400s are also in operation, he said.

SpiceJet rival Kingfisher Airlines Ltd, which stopped flying in October, 2012, defaulted on payments to its employees, banks, airports and leasing companies. Tax authorities had frozen the airline’s bank accounts after disputes that curbed its ability to make payments.

To contact the reporter on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Dave McCombs

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