SpiceJet (SG, Delhi International) has told investors it plans to raise INR32.36 billion rupees (USD385.4 million) to settle liabilities, unground aircraft, induct new planes, and other general purposes. The low-cost carrier made its presentation on September 6 as part of its campaign to woo investors to participate in its planned capital infusion.
The airline plans to raise INR25 billion (USD298 million) via a qualified institutional placement and the remaining INR7.36 billion (USD87.7 million) through previous warrants and a top up from founder Ajay Singh. Presenters told potential investors that a liability settlement and restructuring with existing lessors would allow the induction of more aircraft. In addition, spending money on ungrounding much of the existing fleet would boost the carrier's operations and revenues, as would investing in new aircraft. Finally, making statutory payments and settling vendor debts would significantly reduce financing costs.
Would-be investors were told SpiceJet's operational fleet had decreased from 74 aircraft in 2019 to 28 now, with 36 aircraft grounded because of unpaid dues and funding issues. This includes circa INR37 billion (USD440.7 million) owed to MRO providers and aircraft and engine lessors, plus another INR6.5 billion (USD77.4 million) in outstanding statutory dues.
Turnaround strategies include the aforementioned fleet ungrounding and expansion, increasing market presence on the most profitable routes, consideration of long-haul flights to Europe and North America, cost rationalisation, and an increased focus on ancillary revenue, cargo, loyalty programmes, and co-branded cards.
Earlier this year, SpiceJet had hoped to raise INR22.5 billion (USD268 million) through preferential issues but only managed INR10.6 billion (USD126.2 million) after a key investor backed out. In late July, SpiceJet's board approved another INR30 billion (USD357.3 million) capital raising via institutional placements. In mid-August, Singh said he would sell off a 10% stake in the carrier to help raise those funds. The refined proposal discussed last week still needs to go to a shareholder vote for approval.
Meanwhile, also on September 6, SpiceJet told the Bombay Stock Exchange that it had entered into a term sheet with Carlyle Aviation Partners to restructure certain aircraft lease obligations amounting to USD137.68 million (as of June 30, 2024), whereby outstanding settlements and/or waivers owed to Carlyle and its affiliates will be adjusted to USD97.51 million. According to ch-aviation fleets data, Carlyle has thirteen aircraft placed at SpiceJet - two B737-700s, eight B737-800s, and three B737-900ERs.
