Private carrier SpiceJet is aiming to raise around $100 million, a report said on November 28, claiming that the airline’s promoter Ajay Singh is in talks with global credit funds to raise the targeted amount.
The funds would be used to infuse fresh equity into the airline, while also refinancing part of the promoter debt, Cash control reported, citing sources privy to the development.
“Several global funds are in discussions and talks are currently focused around the price of the loan, which is likely to be a structured credit transaction,” the publication quoted one of the sources as saying.
SpiceJet has yet to issue a statement in response to the report.
The development comes at a time when India’s aviation sector has shown signs of improvement, with analysts pointing out that SpiceJet’s prospects have become brighter following the grounding of bankruptcy-hit carrier GoFirst.
In the first quarter of fiscal year 2023-24, SpiceJet reported a standalone net profit of ₹204.56 crores, against a net loss of ₹788.83 crore in the same quarter last fiscal.
Even as the low-cost airline has become profitable, the impending fees and legal challenges could spell trouble if it fails to raise funds, experts point out.
The budget carrier, on November 20, told the Delhi High Court that it risks insolvency if forced to pay more. ₹100 crore to former promoter Kalanithi Maran, and instead proposed a share issue to settle its dues.
SpiceJet has been embroiled in a legal dispute over the enforcement of a 2018 arbitration award that ordered the airline to pay. ₹579 crore plus interest to Maran and KAL Airways. The company challenged the award in the division bench of the Supreme Court.
In the trading session on November 28, the shares of SpiceJet traded at ₹45.05 at 2:58 pm, higher by 3.14 percent against the previous closing price.
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Updated: 28 Nov 2023, 15:15 IST
(tagsTo Translate)SpiceJet