SpiceJet (SG, Delhi International) is preparing to raise more capital by issuing an unspecified number of securities to qualified institutional buyers as well as issuing shares on a preferential basis to convert existing debt into equity. The matters will be discussed at a February 24 board meeting.
In a February 21 filing with the Bombay Stock Exchange (BSE), SpiceJet said that the boarding meeting would consider the "issuance of equity shares on preferential basis consequent upon conversion of outstanding liabilities into equity shares of the company, subject to applicable regulatory approvals. Further, the board of directors will also discuss and consider options for raising fresh capital through the issue of eligible securities to qualified institutional buyers, subject to applicable regulatory approvals."
As reported by Reuters, the impending deals coincide with ongoing financial and operational challenges for the airline. SpiceJet is expected to report its 4Q 2022 financial results at the board meeting. Previously, the airline reported a 3Q 2022 consolidated net loss of USD104 million, much of its due to rising fuel prices and a depreciating Indian currency. Last year, SpiceJet also experienced a spate of reliability and cancelation issues. That, combined with new competitors and revitalised existing competitors, has seen SpiceJet's marketshare slip.
Late last year, SpiceJet's chairman and managing director, Ajay Singh, said he was looking to raise USD200 million to meet the airline's short and medium-term goals. A portion of that amount will come from India's Emergency Credit Line Guarantee Scheme, with the remainder raised from the markets. Earlier this month, the airline was told to release INR2.7 billion rupees (USD32.6 million) it was holding in trust after losing a long-running legal battle brought by former SpiceJet owner Kalanithi Maran.
SpiceJet flies to 56 destinations in seven countries. The fleet comprises five B737-700s, three B737-700(BDSF)s, eighteen B737-8s (five wet leased from Corendon Airlines), twenty-two B737-800s (four wet leased from Corendon), three B737-900ERs, and twenty-eight DHC-8-Q400s, the ch-aviation fleets module shows.
