SpiceJet's shares fell over 5% on February 14 as CNBC-TV18 reported that investors are apprehensive of fund infusion into the budget carrier.
Quoting sources, CNBC-TV18 reported that liquidity constraints continue at SpiceJet and that it has delayed salaries TDS payments, EPFO deposits to many of its employees due to lack of funds.
Last month, SpiceJet said it has completed raising the first tranche of capital infusion worth Rs 744 crore through the allotment of securities on a preferential basis.
The airline had said its Board of Directors, in a meeting on January 25, approved the allotment of 5.55 crore equity shares on a preferential basis to 54 subscribers. Additionally, SpiceJet's Board sanctioned the allotment of 9.33 crore warrants to Elara India Opportunities Fund Limited and Silver Stallion Limited. The warrants offer subscribers the option to apply for an equivalent number of equity shares.
ALSO READ: SpiceJet plans layoffs to stay afloat amid financial woes; eyes Rs 100 crore annual savings
The stock reacted adversely and at 1130 hours on Wednesday, the airline's scrip on BSE was trading 5.1% lower at Rs 62.25. The 52-week low of the stock is Rs 22.65 and 52-week high is Rs 77.5.
CNBC-TV18 also reported that lessors are unwilling to extend aircraft leases due to payment issues. The airline currently operates around 30 aircraft, including eight that are wet-leased from foreign carriers complete with crew and pilots.
A SpiceJet spokesperson told CNBC-TV18 that January 2024 salaries for over 75% staff has already been credited and processing of salaries for rest is underway and that the pension fund dues will be deposited in the "near future".
Depositing PF dues among top priorities, will be up to date in near future, said the spokesperson.
Earlier this week, SpiceJet has announced plans to trim its workforce. Approximately 1,400 employees, constituting 10-15 percent of its total staff strength, are in line to be laid off.
"As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalization, aimed at achieving profitable growth and positioning ourselves to capitalize on the opportunities in the Indian aviation industry. Through this initiative alone, we anticipate an annual saving of up to Rs 100 crore," said the SpiceJet spokesperson.
SpiceJet reduced its net loss to Rs 428 crore in Q2FY24 from Rs 835 crore in Q2FY23.
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