INSUBCONTINENT EXCLUSIVE:
Low-priced carrier SpiceJet stated on Monday that its board had actually restructured over $100-million (Rs 829-crore) fees to airplane
lessor Carlyle Aviation Partners into equity and compulsorily convertible debentures
The development comes after months of settlements and approvals from lending institutions and lessors.
Carlyle Aviation will get a 7.5
percent stake in SpiceJet and compulsorily convertible debentures in the airlines freight subsidiary as part of the debt-restructuring
plan.
Carlyle Aviation will be issued fresh equity shares worth $29.5 million (Rs 244 crore) of the airline company at Rs 48 a share or at a
Sebi-determined cost, whichever is greater
Furthermore, the lessor, which has 13 aircraft with SpiceJet, will likewise get compulsorily convertible debentures worth $65.5 million (Rs
542 crore) in SpiceXpress and Logistics Private Limited, the airline companys cargo subsidiary, in exchange for lease liabilities, the
company stated.
The airlines board likewise authorized hiving off its cargo service into a different system, based on a last no-objection
from lending institutions, it said.
The airline also announced a settlement with leasing firm Castelake, and a Rs 2,500-crore fundraise
strategy.
Shares of SpiceJet surged about 6 per cent in intra-day trade, however closed almost flat at Rs 39.90 each on the BSE
At the close of trade, its market capitalisation stood at Rs 2401 crore.
Carlyle Aviation Partners picking up a stake in our passenger and
freight business enhances the huge capacity of SpiceJet and SpiceXpress
Carlyle, a global aviation leader, partnering us will tremendously improve our company, SpiceJet Chairman Ajay Singh said in a statement
The transaction will substantially deleverage our balance sheet, thus permitting us access to fresh funds at a competitive rate, and we
intend to follow suit with other lessors as well in the near term, he said.
The airline said the compulsorily convertible debentures will
be converted into equity shares of SpiceXpress at an awaited future valuation of $1.5 billion, however did not share more
information.
According to a source, the freight organization hive-off brings more concentrate on business and will allow the business to tap
fresh funding.
Currently, the airline has 3 trucks and more are anticipated to join the fleet
In Between FY20 and FY22, the airlines cargo incomes increased from Rs 180 crore to Rs 1,943 crore.
The debt restructuring comes as a
breather for the airline company, which has been facing money crunch and financing delays
Safety issues and ongoing litigation with the previous promoter have been other difficulties
Its market share too has actually insinuated the face of increased competition in the domestic market.
In the previous couple of months,
SpiceJet has participated in settlements with other lessors such as Avolon and Goshawk
The airline company reported a net profit, of Rs 110 crore, in Q3FY23 after three consecutive loss-making quarters and is wanting to raise
fresh financial obligation under the ECLGS scheme
The induction of new Boeing737 Max aircraft has actually been slow, and the business has actually needed to resort to wet-leasing aircrafts
from a foreign operator for capacity expansion.
