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SpiceJet Ltd on April 3 said it has spun off its cargo and logistics business SpiceXpress into a separate entity – SpiceXpress and Logistics Pvt Ltd with effect from April 1. Its negative net worth,” the company said. “It also paves the way for SpiceXpress to raise funds independently,” SpiceJet said.
SpiceJet Ltd Chairman Ajay Singh said, “The decision to demerge SpiceXpress is in line with the company’s long-term business plan and will result in significant valuation of the logistics business.”
Mr. Singh further added, “The separation of our cargo and logistics arm is a milestone in our growth story that will unfold in the times to come.” SpiceXpress reported a net profit of ₹51.4 crore for the April-December period of FY23.
“To fuel the growth of its cargo business and provide a more streamlined and efficient service to its customers, SpiceJet Limited has demerged its cargo and logistics division ‘SpiceXpress’ into a separate entity, SpiceXpress and Logistics Pvt. Ltd. The company said.
The consideration for the slump sale will be issued by SpiceXpress to SpiceJet by issue of securities consisting of equity shares and compulsorily convertible debentures “for an aggregate amount of Rs 2,555.77 crore, which will also strengthen SpiceJet’s balance sheet,” it said. Said .
According to Mr Singh, “SpiceXpress will provide a greater and differentiated focus on the cargo and logistics business and allow the possibility of raising capital to accelerate the growth of the business”. “Both SpiceJet and SpiceXpress have huge potential and will complement each other,” he added.
He also said that the Hive Off would not only help SpiceXpress raise free cash, but also significantly reduce the negative net worth of SpiceJet. “Having restructured the more than $100 million owed to Carlyle Aviation Partners last month, Hive Off will further strengthen and deleverage our balance sheet,” said Mr. Singh.