Budget airline SpiceJet shared details of its settlement pact with Carlyle Aviation on September 10, revealing a writeoff and a conversion of arrears into debentures in SpiceXpress, aside of the conversion of dues into equity into the airline.
Carlyle Group's aviation investment and servicing arm will be writing off $40.17 million that the airline owes, in the form lease arrears, a SpiceJet statement said.
Carlyle Aviation will also be converting $20 million in lease arrears into compulsorily convertible debentures (CCDs) of SpiceXpress and Logistics Private Limited - the airline's cargo division.
With this announcement, SpiceJet has managed to significantly pare down debt, the airline said. SpiceJet added that Carlyle will convert $30 million of arrears into equity at Rs 100 per share, a development reported on September 9, thus raising its stake in the airline significantly.
"This strategic partnership between SpiceJet and Carlyle Aviation will bolster SpiceJet's financial position, accelerate its growth plans, and enhance its ability to compete in the Indian aviation market," SpiceJet said.
The airline is hoping to benefit from induction of wide-body aircraft and sees high growth rate in non-metro routes under the Regional Connectivity Service (RCS).
As of today, the airline's fleet has depleted from 74 in 2019 to 28 aircraft in 2024, with 36 planes grounded over pending dues or issues relating to funds. The airline has been dealing with costlier working capital and liabilities to the tune of Rs 3,700 crore to lessors etc, and another Rs 650 crore in statutory dues.
The airline now plans to raise Rs 2,500 crore through QIP, subject to shareholder approval, and another Rs 736 crore through previous warrants and promoter infusion.
Aside of settlement of liabilities, the airline plans to unground the current fleet and line up investments to expand further. Settlement of statutory payments with key vendors will also reduce finance costs, SpiceJet said.
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