The board decided to allot shares and warrants to 64 entities, including financial institutions, foreign institutional investors and private investors, the company said in a statement.
“This is a significant fund raise 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,” Ajay Singh, chairman and managing director, said in the statement.
The company has tapped investors, including Aries Opportunities Fund, Elara India Opportunities Fund, Resonance Opportunities Fund, Prabhudas Lilladher, Nexus Global Fund and Mahapatra Universal Ltd.
SpiceJet plans to issue 320.8 million equity shares and up to 130 million convertible warrants at ₹50 each. The company expects to receive the funds after its annual general meeting next month.
“SpiceJet has the advantage of prime slots and a pilot community, both of which are in short supply in India. If they are able to raise even more than ₹1,000 crore, it is a positive move for the airline as they are an established carrier and this will help them in working capital for long-term investments across MRO (maintenance, repair, and operations), sale and leaseback models,” analyst Gagan Dixit of Elara Capital said.
On Tuesday, the Gurugram-based airline reported a consolidated net loss of ₹449.4 crore in the September quarter, against a net loss of ₹833.2 crore a year ago. Its total income fell 18% on-year to ₹1,725.8 crore in the quarter while expenditure fell 26% to ₹2,175.2 crore.
The covid-19 pandemic took a severe toll on SpiceJet. Its consolidated net loss jumped from ₹302 crore in 2018-19 to ₹937 crore in 2019-20, ₹1,030 crore in 2020-21, ₹1,744 crore in 2021-22 and at ₹1,513 crore in 2022-23. The airline reported a net profit of ₹197.6 crore in the June quarter this year.
Alongside, the airline’s market share has falling since the pandemic outbreak on account of shortage of funds, leaving it with more than 25 aircraft on the ground and an active fleet of nearly 40 aircraft.
SpiceJet’s market share in the domestic market stood at 5% in October, with a passenger traffic of around 628,000, as compared to 7.3% in the same period last year with nearly 830,000 passengers and 16.3% market share with 2 million passengers in October 2019.
Similarly, its international passenger traffic to and from India in the September quarter stood at 409,550, 13% down from a year earlier, and down 43% from the September quarter of 2019, whereas the rest of the Indian carriers registered a combined 26% and 35% increase from 2022 and 2019, respectively, during the same period.
In July, the airline said it will receive fresh capital infusion of ₹500 crore from promoter Singh. Out of this, around ₹200 crore has been received by the company.
During the September quarter, the airline reduced debt of ₹230 crore against allotment of over 48.1 million equity shares to Carlyle Aviation Partners at ₹48 per share, and has settled dues with aircraft lessor Castle Lake as well. A loan of ₹100 crore has also been repaid and closed with City Union Bank.
However, it continues to be entangled in legal disputes with aircraft lessors, including Celestial Aviation, Willis Lease Finance, Wilmington Trust, and Aircastle Ltd that are seeking insolvency proceedings against SpiceJet for defaulting on payments.
Shares of the BSE-listed company ended 4.2% down at ₹58.04. Earlier this week, the company announced its plans to list on National Stock Exchange of India Ltd to reach a wider investor base.
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Published: 12 Dec 2023, 11:37 PM IST