SpiceJet to Raise Rs.744 Crore via Sale of Equities

SpiceJet, a low-cost airline, said on Jan 26 that it had completed raising Rs 744 crore as part of its refinancing plan. On Jan 25, the company's board approved the preferential allotment of 5.55 crore equity shares to 54 subscribers. Additionally, the board approved the preferential allotment of 9.33 crore warrants to Elara India Opportunities Fund Limited and Silver Stallion Limited.

The airline also stated that it has requested additional time from regulators to complete the remaining tranche of funding, which was required due to limited banking days caused by long weekends during the intervening period.

This is part of the funding plan which the cash-strapped carrier had announced in December announced that its board had approved raising fresh capital of Rs 2,250 crore from 63 entities, including financial institutions, foreign institutional investors, high-net-worth individuals, and private investors such as Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, Nexus Global Fund, Prabhudas Lilladher, and Resonance Opportunities Fund.

The funding will be raised in two tranches: Rs 1,591.5 crore in June 2024 and Rs 650 crore in July 2025. Following the funding, Ajay Singh's current shareholding in the airline will fall from 56.49% to at least 38.55% once shareholders approve the issuance of equity and warrants. Singh has pledged 37.9% of his stake to various banks.

Singh stated that the investment will allow the airline to add new capacity while also reducing liabilities, lowering the cost of capital. "It allows us to bring in new capacity and settle some of the liabilities we incurred during Covid. This will also instill confidence in lessors and vendors," he said, adding that the funds raised will put the airline in a good position.