SpiceJet Eyes ₹15 Billion Capital Boost Amid Potential Investor Interest
Indian carrier SpiceJet (SG) is reportedly exploring a substantial capital injection of around ₹15 billion (USD180 million) as it evaluates options to raise fresh funds. The move comes ahead of a scheduled board meeting on December 13, where capital-raising strategies will be discussed. Reports suggest that the airline initially aimed for INR10-12 billion but revised the target upwards due to multiple interested investors.
Key Points:
- Board Meeting on Capital Raising: SpiceJet officially announced its consideration of fresh capital through equity shares and convertible securities. The upcoming board meeting is expected to delve into various options for capital infusion.
- Increased Investment Interest: The possibility of more than one investor expressing interest has reportedly raised SpiceJet’s target to around ₹15 billion, indicating heightened confidence in the airline’s potential.
- Utilization of Funds: The additional funds are intended to address daily operational expenses, including payroll, and support the reactivation of aircraft. Presently, 23 out of the carrier’s 67 aircraft are inactive for various reasons.
- Pending Approvals: Any capital-raising initiatives remain contingent on securing approvals from shareholders and regulatory authorities.
- Legal Settlement Talks: SpiceJet and Celestial Aviation Partners, involved in a lease-related dispute, are reportedly in settlement discussions. The lessor is seeking USD29.9 million in unpaid leases for nine aircraft.
- Insolvency Proceedings: Multiple lessors, including Aircastle and Wilmington Trust SP Services, have sought SpiceJet’s insolvency. A recent dismissal of an insolvency petition by Willis Lease Finance is subject to further legal actions.
- Release of Seized Aircraft: The Dubai International Financial Centre (DIFC) court has ordered the release of a seized B737-800 (VT-SLM) following a legal dispute. SpiceJet is set to inquire into losses incurred during the episode.
- Legal Costs: The court has directed SpiceJet to cover legal costs incurred during the dispute.
As SpiceJet navigates financial challenges and legal disputes, the potential capital boost and ongoing legal developments will shape the airline’s trajectory in the coming months.