GURGAON- On Friday (January 26), SpiceJet (SG) announced the successful raising of Rs 744 crore in the initial phase of its capital infusion through the preferential allotment of shares and warrants.
During a meeting on January 25, the airline’s Board of Directors granted approval for the preferential allotment of 5.55 crore equity shares to 54 subscribers. Furthermore, the Board authorized the allotment of 9.33 crore warrants to Elara India Opportunities Fund Limited and Silver Stallion Limited. These warrants allow subscribers the option to apply for an equivalent number of equity shares.
SpiceJet Raises 744 Crore Capital
SpiceJet is poised to complete another tranche of equity and warrants raise involving the remaining subscribers. However, the airline has sought additional time from the competent authority to finalize the process, citing limited banking days during the intervening period, as stated in an exchange filing and media release.
Ajay Singh, Chairman and Managing Director of SpiceJet, expressed contentment with the successful completion of the initial tranche. He emphasized the confidence demonstrated by investors in SpiceJet’s potential for growth.
“The capital infusion will pave the way for new opportunities for SpiceJet, leading to more efficient cash operations, an expanded fleet, and an extended network.”
Legal Issues with Lessors
The Indian LCC has been grappling with financial constraints, entangled in numerous legal disputes over unpaid dues involving both former promoters and aircraft lessors.
Operating only a fraction of its fleet currently, the financially strained airline faces consistent one-time performance issues, resulting in nearly 40-45 percent of flight delays on a daily basis.
In the preceding month, the airline’s board approved a plan to raise Rs 2,250 crore by issuing up to 130 million convertible warrants and 320.8 million fresh equity shares at an issue price of Rs 50 each.
In the quarter concluding in September 2023, the airline reduced its net loss to Rs 431.54 crore from Rs 837.8 crore a year prior. The Gurugram-based airline reported a net profit of Rs 197.53 crore for the April-June period.
As of December 2023, SpiceJet’s market capitalization was recorded at Rs 4,000 crore. The promoters, led by Singh, held a 56.5 percent stake in the company, with 37.9 percent of it pledged with various lenders.
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