Domestic aviation player SpiceJet has sought shareholders’ nod to raise up to Rs 2,500 crore via issuance of eligible securities through Qualified Institutions Placement (QIP), the company said in a regulatory filing on August 17.
The carrier aims to raise an “aggregate amount not exceeding Rs 25,000,000,000 by way of qualified institutions placement to any eligible person(s) including qualified institutional buyers”The BSE filing noted
In a statement issued along with another regulatory filing, SpiceJet also announced the transfer of its logistic business to its subsidiary SpiceXpress, subject to the approval of shareholders.
“The logistics business has been valued at INR 2,555.77 crore based on anindependent valuation exercise carried out by the Company and the purchase consideration for the same shall be discharged by SpiceXpress by issuance of shares of SpiceXpress to SpiceJet, subject to all approvals as may be required.
It is expected that SpiceXpress will operate as a separate entity upon transfer of business on or around October 1, 2021,” the statement noted.
- SpiceXpress earned a net profit of Rs 30 crore, with revenue for the segment up 285 percent to Rs 473 crore for Q1FY22 from Rs 166 crore in the same quarter last year.
- This came even as SpiceJet posted a consolidated net loss of Rs 731.12 crore against a loss of Rs 600.52 crore in the same quarter last year.
- Commenting on the decision to transfer the logistics business to SpiceXpress, Ajay Singh said:
- “The proposed transfer of business to SpiceXpress will allow the new company to rapidly grow its innovative logistics platform and its unique fulfilment as a service business model.
- SpiceXpress will also be able to raise capital independent of SpiceJet to fund this growth. We are confident that the performance of SpiceXpress as an independent entity will leverage and unlock significant value for SpiceJet and all its shareholders.”
SpiceJet share price fell more than 11 percent intraday on August 16 after the company’s net losses widened in the quarter ended June 2021.
Information Source: Money Control and TOI
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