SpiceJet (SG, Delhi International) has raised another round of capital after allotting equity shares and warrants to several investors. At the same time, two courts have given the LCC until mid-March to return an engine to Engine Lease Finance and pay an MRO debt to Credit Suisse.

In a February 22, 2024, Bombay Stock Exchange (BSE) filing, SpiceJet said its board had agreed to allot 40,100,000 equity shares with a face value of INR10 rupees (USD0.12) each and an issue price of INR50 (USD0.60) each on a preferential basis to Aries Opportunities Fund Limited and Payal Nitin Magiya. SpiceJet allotted Aries 40 million of the shares while Magiya scooped up the remaining 100,000.

SpiceJet's board also agreed to allot 23,100,000 warrants, with the holders having the option to apply for and be allotted the equivalent number of equity shares at a face value of INR10 each based on an issue price of INR50 each to the following persons:

  • Elara India Opportunities Fund Limited, to be allotted 6.3 million warrants;
  • Jyoti Gupta, to be allotted 5 million warrants;
  • Mayur Gupta, to be allotted 5 million warrants; and
  • Arunim Purkayastha, to be allotted 6.8 million warrants.

Last week's allotment follows SpiceJet issuing INR7.44 billion (USD89.8 million) worth of equity shares and warrants to various investors. All up, the financially-imperilled carrier intends to raise INR22.5 billion (USD271.5 million) via a series of share and warrant allotments.

"The company has raised a total investment of INR10.6 billion (USD127.9 million)," said Chairman and Managing Director Ajay Singh. "This significant capital infusion reaffirms investor confidence in SpiceJet's growth prospects and strengthens our financial position for the future. With this additional funding, we are well-equipped to pursue our expansion plans and enhance our operational capabilities."

Meanwhile, the Indian courts drew a line under two long-running legal disputes involving SpiceJet. On February 19, 2024, the Supreme Court of India ruled that the LCC must pay USD1.25 million to Credit Suisse by March 15, ending an MRO payment saga that dates back a decade.

In 2011, SpiceJet entered into a line maintenance agreement with Switzerland-based SR Technics. Shortly after, that entity signed a financing agreement with Credit Suisse giving the bank the right to issue and receive payment on invoices for MRO services undertaken by SR Technics. Credit Suisse has been in and out of the courts chasing SpiceJet debts ever since.

When ordering payment of the outstanding amount last week, Judges Hima Kohli and Ahsanuddin Amanullah noted that if SpiceJet was in a financial position to bid for Go First (Mumbai International), it should be able to pay its existing debts.

In a second legal ruling on February 22, 2024, the Delhi High Court ordered SpiceJet to return an engine to Engine Lease Finance BV at its own expense by March 10. The court told the LCC there would be no further extensions of time and ordered Singh to file an affidavit within seven days, guaranteeing the engine's return by the due date.

Settlement talks between Engine Lease Finance and SpiceJet had broken down over who should pay maintenance costs. The lessor maintains the engine is currently unfit for service, and SpiceJet should be responsible for returning it to a serviceable state. The airline says the engine's condition results from normal wear and tear. The disagreement over the engine's return and its state followed a protracted legal dispute between the two parties concerning unpaid leases and payment plans not being abided by. SpiceJet states that the engine will be returned by mid-March. However, the airline has yet to receive customs clearance to do so.