Low-fare airline SpiceJet has sought shareholders’ nod to sell 5.91% stake to aircraft lessor Carlyle Aviation at ₹48 per share. Shares of SpiceJet jumped on the news, rising 7.2% on the BSE to close at ₹31.42, on a day the benchmark Sensex index fell 1%.
The company proposed to issue up to 4.81 crore equity shares of the face value of ₹10 worth ₹48.1 crore to nine associated companies of Carlyle. The issue will be on equity conversion of Spicejet’s dues totalling $28.2 million.
The company also sought shareholders’ nod to re-appoint Ajay Singh as managing director with a monthly fixed pay of ₹60 lakh a month, 2.5% of annual net profit of the company as variable pay, and other benefits.
The company also sought nod to raise up to ₹2500 crore through a qualified institutional placement.
In February, SpiceJet had said that Carlyle had decided to convert $100 million of outstanding dues into equity and compulsorily convertible debentures. The board had approved a proposal to transfer compulsorily converted debentures (CCDs) of SpiceXpress and Logistics Pvt. Ltd, held by SpiceJet aggregating to $65.5 million to Carlyle Aviation, subject to regulatory approvals. The CCDs were to be converted into equity shares of SpiceXpress at an anticipated future valuation of $1.5 billion or ₹12,422 crore, the airline had said.
In February, the airline had said that it has plans to hold discussions with other lessors to further deleverage its balance sheet.
The airline’s total liabilities were at about ₹14,000 crore till December 2022, and the airline has said it will engage with lessors to reduce these liabilities.
The airline had posted a consolidated net loss of ₹302 crore in FY19, which shot up to ₹937 crore in FY20, followed by ₹1,030 crore in FY21, and ₹1,744 crore in FY22.
In the first three quarters of FY23, its consolidated net loss stood at ₹1,507 crore. The fourth quarter results are yet to be announced. Besides, the airline is entangled in legal disputes with lessors.
Last month, SpiceJet had said that it will receive a fresh capital infusion of ₹500 crore from promoter Singh. Singh is expected to infuse the funds by subscribing to fresh equity shares and/or convertible instruments.
Meanwhile, Singh and the airline are also involved in a legal battle against SpiceJet’s former promoters, Kalanithi Maran’s Sun Group. In the latest development, the Marans have ruled out the possibility of an amicable settlement with SpiceJet Ltd, insisting that the cash-strapped airline comply with the Supreme Court order to pay outstanding arbitral amount of ₹380 crore to it.
While the company announced in February that Carlyle Aviation is expected to acquire 7.5% stake in the airline, the net proposed stake now stands at 5.91% following the increase in stake of the airline’s CMD Ajay Singh as a result of his fund infusion into the budget carrier.
