SpiceJet shares surged in early trade on February 24, with the beleaguered airline scheduled to release its December quarter earnings later in the day.
Reports said that Carlyle Aviation Partners, a leasing firm owned by global private equity giant Carlyle Group, may convert its outstanding rental dues into equity, obtaining a 5 percent stake in the low-cost carrier.
At 11.47 am, shares of SpiceJet were trading at Rs 36.20, up 2.26 percent on the National Stock Exchange.
The proposed deal would involve Carlyle converting more than $100 million of SpiceJet's outstanding dues into equity as well as compulsorily convertible debentures (CCDs) in SpiceJet's cargo arm, SpiceXpress. As one of the biggest lessors for SpiceJet, this move is expected to significantly reduce the airline's debt and pave the way for future growth, said analysts.
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Investors cheered the possible deal, which is being seen as a step towards SpiceJet's financial recovery. Even though the company has struggled to raise capital over the past two years to support its growth plans, it is set to consider raising capital yet again at its board meeting later in the day.
In the September quarter, SpiceJet's net loss widened to Rs 833 crore from Rs 570.5 crore in the corresponding quarter of the previous year. Its revenue from operations, however increased by 45 percent to Rs 1,954 crore year-on-year.
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