SpiceJet to raise ₹2,500 crore fresh capital, convert Carlyle’s debt into equity and demerge cargo biz

• SpiceJet on Monday announced that its board has approved plans to raise fresh capital up to ₹2,500 crore via QIP.
  
• The board also approved the conversion of its existing dues to Carlyle Aviation into equity worth $29.5 million.
  
• “This restructuring will substantially reduce liabilities, and help raise funds,” the company said.
  

Low-cost carrier SpiceJet on Monday said its board had approved plans to raise fresh capital up to ₹2,500 crore, and convert its dues to Carlyle Aviation into equity worth $29.5 million.

In an exchange filing, the company also said that it would transfer its cargo business to its subsidiary SpiceXpress & Logistics for ₹2,556 crore in the form of equity shares and debentures.

The company’s shares jumped 6.4% on Monday, before paring gains to 2% by mid afternoon.

Key amongst the proposals passed by the airline’s board on Monday was a fresh capital raise of ₹2,500 crore via a qualified institutional placement (QIP).

“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,” the company said in its exchange filing.

‘Restructuring will help us raise funds for biz operations’

The debt-to-equity swap by Carlyle Aviation, one of the biggest lessors of SpiceJet, was also a part of the proposals passed by the board.

This will include the conversion of dues worth $29.5 million into equity shares of SpiceJet. Further, Carlyle Aviation will also have its outstanding lease liabilities worth $65.5 million converted to compulsorily convertible debentures of SpiceXpress & Logistics.

“This restructuring will substantially reduce the existing liabilities of the company and will help in fund raising for the business operations of the company,” SpiceJet said in its exchange filing.

At the end of the September quarter, SpiceJet reported consolidated borrowings and trade payables amounting to ₹4,854 crore, and lease liabilities amounting to ₹7,071 crore. It also reported dues amounting to ₹578 crore to Kalanithi Maran and KAL Airways, of which it had subsequently paid ₹308 crore, with the balance ₹270 crore still being due.

The airline reported total liabilities of ₹14,081 crore at the end of the December quarter.

Since the pandemic broke out, SpiceJet has posted a cumulative loss of ₹4,240 crore till date (FY21 to Q3 FY23).


Source: Company reports

SpiceXpress reported a profit of ₹12 crore and a revenue of ₹120 crore during the December quarter. Overall, SpiceJet’s net profit during the quarter stood at ₹110 crore, growing 160% year-on-year, while its revenue edged up 2.4% YoY to ₹2,317 crore.

“The profits have been driven by a strong performance in both our passenger and cargo businesses,” said Ajay Singh, CMD of SpiceJet.

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