SpiceJet logistics arm, SpiceXpress valued at USD 1bn in deal with Carlyle
Feb 23, 2023
By Ashoke Raj
New Delhi [India], February 23 : US-based leasing firm Carlyle Aviation Partners will pick a 5 per cent stake in the Ajay Singh-led SpiceJet, sources said.
The homegrown airline will also issue compulsorily convertible debentures (CCDs) in SpiceXpress to Carlyle Aviation Partners, valuing the cargo business at over USD 1 billion, sources said.
Airline leasing giant Carlyle Aviation Partners could convert these CCDs to equity. This will convert SpiceJet's outstanding lease rental into equity.
"Part of outstanding dues (to Carlyle) will be converted into CCDs of SpiceXpress valuing the company at over USD 1 billion while some part will be converted into equity in SpiceJet," a source said.
Aircraft lessor Carlyle Aviation Partners is the commercial aviation investment and servicing arm of Carlyle's USD 143-billion Global Credit platform. Carlyle is also SpiceJet's biggest lessor with the airline operating 13 of its Boeing 737 aircraft.
SpiceJet informed the BSE on February 21 that its board of directors will meet on February 24.
"Board of Directors of the Company in its meeting scheduled to be held on February 24 will discuss and consider, inter-alia, issuance of equity shares on a preferential basis consequent upon conversion of outstanding liabilities into equity shares of the Company, subject to applicable regulatory approvals," SpiceJet had informed BSE on Thursday.
"Further, the board of directors will also discuss and consider options for raising fresh capital through the issue of eligible securities to qualified institutional buyers, subject to applicable regulatory approvals."
The deal will Carlyle will come as a huge boost for SpiceJet, resulting in a significant reduction in debt for the company and deleveraging its balance sheet for future expansion.
"The transaction will wipe out over USD 100 million debt of SpiceJet, thereby strengthening its balance sheet for future expansion. The move will substantially deleverage the Company's balance sheet and allow the company to access fresh funding at competitive rates," the source said.
