SpiceJet board approves over Rs 2,250 crore capital raise through equity issuance
Dec 12, 2023
Gurugram (Haryana) [India], December 12 : SpiceJet Ltd's Board of Directors has greenlit a significant capital infusion, approving the raising of over Rs 2,250 crore (about USD 270 million) through the issuance of equity shares.
According to SpiceJet, this move aims to fortify the airline's financial position and facilitate its growth plans.
The Board unanimously approved the issuance of equity shares/equity warrants under private placement, subject to necessary approvals.
Investors such as Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund, and others are part of the proposed preferential issues.
The funds will play a pivotal role in financing operational expansion initiatives, including fleet enhancement, route network expansion, and technological advancements.
Ajay Singh, Chairman and Managing Director of SpiceJet, expressed confidence in the positive impact of this capital raise on the airline's future.
Singh said, "This is a significant fundraising and it is designed to strengthen SpiceJet's financial position, enhance operational capabilities, settle outstanding issues and position the airline again for sustained growth in the dynamic aviation sector,"
SpiceJet reduced its net loss to Rs 428 crore in Q2 FY2024, a significant improvement from the net loss of Rs 835 crore in Q2 FY2023.
The airline maintained strong performance in the passenger business, with an industry-leading domestic load factor of 86.6 per cent.
Passenger RASK (Revenue per Available Seat Kilometer) increased by 11 per cent, attributed to an 8 per cent increase in yield and a 3 per cent rise in the load factor.
The Company undertook a planned and phased infusion of fresh capital by the promoter, with Rs 200 crore already received out of the Rs 500 Crore commitment.
Debt-to-equity conversion with Carlyle Aviation Partners, settlement of dues with aircraft lessor Castle Lake, and successful repayment and closure of a Rs 100 Crore loan from City Union Bank were achievements.
Ajay Singh emphasized SpiceJet's proactive measures in navigating challenges, underscoring the airline's commitment to operational efficiency and strategic decision-making.
Singh said, "The airline continues to explore avenues for growth and profitability in the evolving market and the fresh infusion of over Rs 2,250 Crore in the Company will bring renewed energy to adapt to the changing circumstances."
