SpiceJet raises INR 2,250 Cr by equity shares

The airline board low-cost carrier SpiceJet on December 12 today approved the raising of fresh capital of over INR 2,250 Crore (approximately USD 270 million) through the issuance of equity shares to Financial Institutions, FII’s, HNI’s and private investors aimed at fortifying the airline's financial strength and accelerating its growth trajectory.

The approved proposal to raise funds through the issue of up to 130 million convertible warrants each and 320.8 million fresh equity shares each at an issue price of Rs. 50 per unit. 
 
As per the proposal, it will issue convertible warrants to 64 allottees, including Prabhudas Lilladher Advisory Services, LKPFinance, Martina Developers, and Fincon. It would raise around 22.50 billion rupees through the issue of preferential shares and warrants as the cash troubled air board seeks to regain its full operability. It will be helpful to restore its grounded fleet of 25 jets and will also clear unpaid salaries.

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The cash-strapped carrier has been struggling since a long time as its second-quarter loss narrowed to 4.32 billion rupees from 8 .38 billion rupees a year earlier by roughly halving its operating expenses. Its revenue declined roughly 30 percent to 13.48 billion rupees in the three months to Sep 30.

The company announced to issue equity shares/ equity warrants under private placement basis, subjected to shareholders and regulatory approvals. It will issue up to almost 32 crore equity shares and 13 crore convertible warrants at an issue price of Rs. 50. 

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According to the MD and chairman of the respective organisation, this has to be stimulated as a significant fundraising and it is designed to strengthen the company's financial position, enhancing and improving operational capabilities, restoring aviation synergy , settling the outstanding issues and regain the sustainable dynamic growth.

The previous quarters results are showing severe losses which accumulated the net fiscal loss of around 400 crore. Meanwhile, previous quarters have been astonished by pathetic losses.

The capital raised will be instrumental in funding operational expansion initiatives, including fleet enhancement, route network expansion along with technological advancements as per SpiceJet. 

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