SpiceJet Secures Approval for INR30 Billion Fundraising

SpiceJet has successfully gained shareholder approval for a substantial capital raise, aiming to secure up to INR30 billion (approximately USD357.7 million) through the issuance of securities. The postal ballot results showed overwhelming support, with 1,459 shareholders casting a total of 408,784,445 votes in favor, which accounts for 99.8061% of the total votes. In contrast, only 109 shareholders voted against the proposal, casting 794,100 votes, reported ch-aviation.com.

According to recent reports from ch-aviation, the airline intends to utilize the raised funds for multiple strategic purposes. Key priorities include settling outstanding liabilities with current airframe and engine lessors, reactivating a significant portion of its grounded fleet, acquiring new aircraft, and making necessary statutory payments. The financial boost is also aimed at clearing debts with essential vendors, thereby stabilizing the airline’s operational capacity.

Earlier in the year, SpiceJet had set a target to raise INR22.5 billion (around USD268 million) through preferential issues. However, the airline was only able to secure INR10.6 billion (USD126.2 million) after a significant investor withdrew from the deal. This setback underscored the challenges SpiceJet faces in its recovery efforts and the urgent need for additional capital to enhance its operational viability.

Ch-aviation fleet data reveals that the current situation is quite critical for SpiceJet, with 39 out of its 61 aircraft currently inactive. Among the grounded fleet are three of the five B737-700s, three of three B737-700(BDSF)s, five of seven B737-8s, six of seventeen B737-800s, two of three B737-900ERs, and a staggering twenty of twenty-four DHC-8-Q400s. The airline has cited that these aircraft remain out of service primarily due to unpaid dues and ongoing funding shortfalls.

Despite these challenges, SpiceJet continues to operate services to 41 airports across five countries, reflecting a commitment to maintaining its route network even amid financial difficulties. The forthcoming capital infusion is anticipated to provide a much-needed lifeline, enabling the airline to not only revive its dormant aircraft but also enhance its overall operational resilience.

In light of the competitive landscape in the airline industry, SpiceJet’s successful capital raise could play a pivotal role in its strategic turnaround. As the airline navigates through this critical phase, the focus will remain on stabilizing operations and rebuilding its fleet capacity to ensure it meets market demands effectively. This move highlights the ongoing importance of financial restructuring and investor confidence in fostering recovery within the aviation sector.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com