Aviation News

SpiceJet improves financial position with another Rs 316 cr fundraising, ET Infra


In a move signaling investor confidence, SpiceJet has secured an additional Rs 316 crore in investments, ramping up its total funds raised to Rs 1,060 crore through a preferential issue, the company said in a statement.

“The combined sum reflects strong investor confidence in SpiceJet’s future and unlocks exciting opportunities for the company,” the private carrier said.

During the Preferential Allotment Committee’s meeting on February 21, 2024, SpiceJet’s Board of Directors greenlit the allocation of 4.01 crore equity shares to two investors, including Aries Opportunities Fund Limited. The committee also approved the issuance of 2.31 crore warrants, granting the right to apply for an equivalent number of equity shares, to four investors, including Elara India Opportunities Fund Limited.

SpiceJet’s shares soared in early trade today and were up over 5% at Rs 68.90 apiece at 10:25 am, while the broader BSE Sensex plunged 500 points.

“The Company has raised a total investment of Rs 1060 Crore. This significant capital infusion reaffirms investor confidence in SpiceJet’s growth prospects and strengthens our financial position for the future,” said Ajay Singh, SpiceJet’s Chairman and Managing Director.

With this added funding, SpiceJet is fully prepared to advance its expansion initiatives and strengthen the operational capacities, the chairman said.

SpiceJet is going through a revival strategy. It had earlier this year secured Rs 744 crore as the first tranche of capital infusion, with additional subscriptions pending regulatory approval. The company has also initiated the process to raise an additional INR 1,000 crore.

Additionally, the airline has accessed approximately Rs 1,000 crore under the government’s Emergency Credit Line Guarantee Scheme (ECLGS), and Singh has pledged to inject Rs 500 crore.

Earlier in February, SpiceJet said it will sack 1,400 employees, constituting 15% of its staff, as part of its turnaround and cost-cutting strategy.

In a recent meeting with senior officials, SpiceJet’s Chairman and Managing Director Ajay Singh spoke about the significance of prudent spending and announced his personal oversight of major expenditures. The airline is looking to prioritise fleet upgrades, improve on-time performance, and implement cost-cutting measures to streamline operations, as outlined in an internal note last month. SpiceJet is currently undergoing fund-raising efforts from various investors.

  • Published On Feb 22, 2024 at 04:47 PM IST

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