New Delhi: Low-cost carrier SpiceJet on Thursday said it has secured another ₹316 crore in funding, bringing the total raised through its preferred subject to ₹1,060 crore.
The funding, which comes amid a severe cash crunch, will allow the struggling airline to continue expansion plans.
The budget carrier had to lay off about 15% of its staff, or about 1,500 employees, following a two-thirds reduction in its fleet size due to a lack of funds. The airline expects to save all around ₹100 crore per annum from these measures.
“With this additional funding, we are well equipped to continue our expansion plans and enhance our operational capabilities… It has broadened our perspective on the potential opportunities ahead,” Ajay Singh, chairman and managing director, SpiceJet, said in a statement.
The pandemic dealt a severe blow to SpiceJet, eroding its domestic market share from 16.5% in December 2019 to 5.6% in December 2023. The airline’s net fleet size fell to 41 aircraft from 120 aircraft in 2019. Of these, around 10 are in 2019 .wet lease, meaning aircraft leased together with pilots and cabin crew.
Additionally, it saw its losses widen, from ₹302 crore in FY19 to ₹1,513 crore in FY23. The airline is also involved in numerous legal disputes with creditors over unpaid invoices.
On 21 February, the board of directors of the airline’s preferential allotment committee approved the issuance of 40.1 million equity shares to two investors on a preferred basis. Of these, Aries Opportunities Fund Ltd was allotted 40 million shares, and Payal Nitin Magiya received 100,000 shares.
The committee also approved the allocation of 23.1 million warrants convertible into an equal number of equity shares to four investors. This includes 6.3 million warrants to Elara India Opportunities Fund Ltd, 5.0 million warrants each to Jyoti Gupta and Mayur Gupta, and 6.8 million warrants to Arunim Purkayastha.
In January, SpiceJet received in-principle approval from the BSE to raise ₹2,242 crore by issuing shares and warrants convertible into shares on a preferential basis.
The airline previously said it plans to use the funds to reduce liabilities accrued during the pandemic and also to clear legal liabilities. It recently completed a capital infusion aggregating to ₹744 crore by allotting shares and warrants on a preferential basis.
Last week, SpiceJet’s Singh along with Busy Bee Aviation Private Ltd jointly bid for bankrupt Go First airline.
Unlock a world of Perks! From insightful newsletters to real-time stock tracking, breaking news and a personalized news feed – it’s all here, just a click away! Login Now!
Catch all Corporate news and Updates on Live Mint. Check out all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates and Live Business News.
More or less
Published: 22 Feb 2024, 15:00 IST
(tagsTo Translate)SpiceJet