No-frills domestic airline SpiceJet on Monday said its board at its meet on Febraury 27, 2023 has approved to transfer its cargo business to its subsidiary SpiceXpress & Logistics (SXPL) for ₹2556 crore and further approved to raise ₹2,500 crore in fresh capital through Qualified Institutions Placement (QIP).
The airline will also convert its dues to aircraft lessor Carlyle Aviation into shares (debt-equity swap) worth $29.5 million. SpiceJet shares rose more than 5% to ₹42 apiece on the BSE in afternoon deals after the fundraise update.
“The Board of Directors of the Company has proposed to seek enabling approval of members of the Company (which will be valid for 365 days from the date of passing of the resolution) for raising fresh capital of up to ₹2,500 Crore through issue of eligible securities to qualified institutional buyers, in accordance with the relevant provisions of applicable law and subject to receipt of applicable regulatory approvals, as may be required," SpiceJet informed in an exchange filing today.
For the transfer of the cargo business, the low-cost carrier said "Cargo business shall be exclusively undertaken by SXPL effective April 1, 2023 or such other date as may be finalized. The consideration for said transfer of cargo business undertaking shall be discharged by SXPL by issuance of securities in the combination of equity shares and Compulsorily Convertible Debentures (CCDs) to the Company for an aggregate amount of ₹2,555.77 crore.
SpiceJet said that this restructuring will substantially reduce the existing liabilities of the company and will help in fund raising for the business operations.
As a part of a proposed restructuring with aircraft lessor Carlyle Aviation Partners, the board has approved issue equity shares on preferential basis to these aircraft lessors consequent upon conversion of their existing lease liabilities equivalent to an amount not exceeding $29.5 million at price of ₹48 per equity share or such price as may be determined in accordance with extant preferential issue guidelines, whichever is higher.
The airline on Friday reported a multi-fold rise in net profit to ₹107 crore in the three months ended December 2022. The meeting to consider fundraising options was originally scheduled to be on February 24, but was shifted to be on February 27.
