SpiceJet, grappling with financial challenges, has found a much-needed lifeline with a substantial investment of Rs 2,254 crore. The infusion of funds, achieved through the issuance of 130 million convertible warrants and 320.8 million fresh equity shares, marks a pivotal moment in the journey of the beleaguered airline.
Diverse Investor Pool:
The fundraising effort involves 64 investors, including prominent funds like Elara India Opportunities Fund, Aries Opportunities Fund, Prabhudas Lilladher, Nexus Global, and notable individuals like Harihara Mahapatra and Arjun Juneja of Mankind Pharma.
Financial Landscape:
Despite financial challenges, the shares will be issued at Rs 50 per piece, signaling confidence in SpiceJet’s potential recovery amidst the industry’s growth, with shares closing at Rs 58.04 on Tuesday.
Strategic Utilisation of Funds:
The injected funds are crucial for SpiceJet’s revival and expansion, supporting operational initiatives such as fleet enhancement, route expansion, and technological advancements.
Industry Insights:
Amisha Vora, Chairperson & MD of Prabhudas Liladher group, emphasises the funds’ potential to not only revive SpiceJet but also increase its market share. Acquiring new aircraft and upgrading the fleet are key strategies to boost revenue and cut operational costs.
Promoter’s Stake and Future Outlook:
Promoter Ajay Singh, holding a 56.5% stake, will retain the largest stake (45%) after the transaction. Singh anticipates the investment will enable the induction of fresh capacity, settling Covid-related liabilities, and building confidence among lessors and vendors.
Addressing Liabilities and Restructuring:
SpiceJet, facing Rs 6,000 crore in short-term liabilities, plans to use the equity infusion to settle unpaid statutory dues, reduce interest costs, and provide flexibility for restructuring.
Future Prospects with Boeing:
SpiceJet looks to resume discussions with Boeing for the induction of over 200 new 737 Max aircraft, aiming to enhance operational capabilities and strengthen its market position.
SpiceJet’s successful fundraising signifies a turning point, offering hope for both financial recovery and operational expansion. With diverse investors and a strategic fund utilization plan, the airline is poised for a positive trajectory in the dynamic Indian aviation sector.
