SpiceJet plans to raise Rs 3,200 crore through debt, equity

Image used for representational purpose only. | Photo Credit: Reuters

Cash-strapped domestic airline SpiceJet plans to raise Rs 3,200 crore through a QIP, warrants and capital infusion by the promoter, the airline said in a presentation on Friday (September 6, 2024).

SpiceJet said in the presentation that the funds will be utilised for retiring operational fleet, settlement of liabilities, induction of new fleet and other general purposes.

“SpiceJet plans to raise Rs 2,500 crore through QIP and Rs 736 crore through previous warrants and promoter investment,” the airline said in a corporate presentation to investors ahead of the proposed capital infusion.

The proposed raise of funds is subject to the approval of shareholders.

Ajay Singh-promoted SpiceJet could raise only Rs 1,060 crore through preferential issuance in January this year, while in December last year it had announced a funding plan of Rs 2,250 crore.

The airline has attributed its current problems to factors such as fleet shrinkage and subsequent grounding of aircraft, high cost of working capital, rising fixed costs, fixed rentals at airports and outstanding statutory dues.

Its operating fleet is projected to drop to 28 planes in 2024 from 74 in 2019, while 36 aircraft remain grounded due to financing issues, according to the presentation.

However, according to the live aircraft fleet tracking website, planespotter.netBy 5 September it had only 20 aircraft in operation and 38 on the ground.

It is also worth noting that many of these aircraft are out of operation, as SpiceJet’s lessors and other vendors have dragged the airline to court for non-payment.

It also said that there are Rs 3,700 crore dues to be paid to the lessor, engineering and EDC liabilities, which would result in grounding of the aircraft, and statutory dues of Rs 650 crore.

SpiceJet also said that along with its turnaround strategy, fleet expansion and increasing presence on profitable routes, it will also focus on ancillary revenues and cargo, among others.