Low-cost carrier SpiceJet Ltd is likely to sell a 5% stake to its largest lessor Carlyle Aviation Partners, people aware of the development said.
The airline had been in discussions with strategic investors since last year for a stake sale to bring in funds, two people said on the condition of anonymity.
Under the proposed deal, private equity giant Carlyle is expected to convert over $100 million of outstanding dues into equity in SpiceJet and compulsorily convertible debentures (CCDs) in the cargo arm SpiceXpress, Mint has learnt.
The proposed deal has pegged the worth of airline's logistics subsidiary SpiceXpress at over $1 billion in deal with Carlyle.
The deal is expected to result in significant reduction in debt for the airline and is expected to help SpiceJet to deleverage balance sheet for future expansion, people aware of the matter said.
Aircraft lessor, Carlyle Aviation Partners is the commercial aviation investment and servicing arm of Carlyle's $143 billion Global Credit platform. It is a multi-strategy aviation investment manager having $11.5 billion in assets under its management.
The transaction is expected to reduce the debt of SpiceJet by over $100 million and is likely to aid the company to access fresh funding at competitive rates in future, they added.
The airline has attempted to raise funds several times in the last two years. SpiceJet said last year that it was engaged with investment bankers to raise up to $200 million to achieve its future plans.
The airline also has plans to hive off SpiceXpress. Banks and shareholders gave their approval to hive off SpiceXpress in July 2022 and the carrier’s CMD Ajay Singh said the bifurcation will be done by the first week of August. The timeline for this exercise was later postponed to the October-December quarter of 2022 and is now expected to take place in the March quarter, a person aware of the development said.
