SpiceJet (SG, Delhi International) will raise INR22.5 billion rupees (USD270 million) to pay debts and reactivate aircraft. The LCC's board of directors approved the capital raising at a meeting on December 12, 2023, and will issue preferential shares and warrants.
A filing with the Bombay Stock Exchange (BSE) on the same day reveals that SpiceJet will issue just over 320 million equity shares at INR50 each (USD0.6) and 130 million convertible warrants issued at the same price. The filing lists 64 proposed allottees, including the Nexus Global Fund, Elara India Opportunities Fund Limited, and Aries Opportunities Fund Limited.
“This is a significant fund raise and it is designed to strengthen SpiceJet’s financial position, enhance operational capabilities, settle outstanding issues and position the airline again for sustained growth," said SpiceJet Managing Director Ajay Singh.
The capital raising is SpiceJet's third this year and, based on current expenses, will cover the airline's operating costs for approximately three months. Multiple lessors, creditors, and former majority owner Kalanithi Maran are pursuing SpiceJet in the courts for debts and arrears. In November, the LCC's legal representative told the Delhi High Court that the carrier was "struggling to stay afloat."
SpiceJet's fleet includes 34 active aircraft, 23 inactive aircraft, and ten wet-leased aircraft. Earlier this year, the airline had over 90 aircraft in its fleet. The airline has announced several reactivation programs but has struggled to stick to reactivation timelines. The slimmed-down fleet has seen SpiceJet's local market share fall from 7.3% in 4Q 2022 to 5.4% now.
On the same day, the airline announced the capital raising, it also released its financials for the three months to September 30, 2023. After reporting three consecutive quarterly profits, SpiceJet posted a net quarterly loss of INR4.32 billion (USD51.8 million) against revenues of INR14.3 billion (USD171.5 million) and costs of INR21.6 billion (USD259 million). Total losses over the past five years have amounted to around INR55 billion (USD659.5 million).
“The July-September quarter has historically been a challenging period for the aviation industry. This year, the challenges were further compounded by elevated fuel prices, impacting operational costs," said Singh. "The airline continues to explore avenues for growth and profitability in the evolving market, and the fresh infusion of over INR22 billion in the company will bring renewed energy to adapt to the changing circumstances."
Separately, there are reports that SpiceJet intends to list its shares on India's National Stock Exchange (NSE). The airline trades on the BSE with a current market capitalisation of INR39.7 billion rupees (USD476 million).
