SpiceJet board will meet to consider fund raising funds, conversion of outstanding liabilities into equity

SpiceJet on Tuesday said its board will meet on Friday to consider options to raise funds as well as to convert certain outstanding liabilities into equity shares of the company. The no-frills airline, which has been grappling with multiple headwinds, including legal woes, is looking to raise fresh capital through issuance of eligible securities to qualified institutional buyers.

Besides, the carrier plans to issue equity shares on preferential basis consequent upon conversion of outstanding liabilities into equity shares of the company, subject to applicable regulatory approvals, according to a filing to the BSE.

Both plans will be taken up by the board of directors during its meeting scheduled for February 24.

Specific details about the proposals could not be immediately ascertained.

In December last year, SpiceJet Chairman and Managing Director Ajay Singh told shareholders that the company is engaged with investment bankers to raise up to USD 200 million in order to achieve its future plans.

He had also said the increase in the Emergency Credit Line Guarantee Scheme (ECLGS) to Rs 1,500 crore will go a long way in providing the much-needed stability to the sector.

"The infusion of additional funds will help SpiceJet normalise its obligations, unground its fleet and induct new planes into our fleet... we have also completed a series of settlements with most of our major partners including manufacturers and lessors setting the stage for our seamless growth and expansion," he had said.

On Tuesday, shares of the airline declined nearly 2 per cent to Rs 37.60 apiece in the afternoon trade on the BSE.