Shares of SpiceJet gained 7 percent in early trade on July 13 as promoter Ajay Singh has decided to infuse Rs 500 crore into the company by way of subscribing fresh equity shares and/or convertible instruments.
"The board of directors of SpiceJet in its meeting held on July 12, 2023, considered options for raising fresh capital for the company wherein Mr. Ajay Singh, Promoter of the company in order to strengthen the financial position of the company offered to infuse Rs 500 crore by way of subscription to equity shares and/or convertible securities/equity share warrants on preferential basis along with promoter group of the company," the statement read.
The board deliberated on the matter and agreed to issue equity shares and/or convertible securities/equity share warrants on preferential basis to the promoter and/or the promoter group of the company, on preferential basis, in one or more tranches at an issue price to be determined in accordance with the SEBI ICDR Regulations for an amount of Rs 500 crore subject to the approval(s) of the shareholders of the company, the Securities and Exchange Board of India and/or any other competent authorities and such other approvals, consent, etc. as may be required in this regard.
With this fund infusion by the promoter, SpiceJet would be entitled to additional credit facilities of Rs. 206 Crore under the Emergency Credit Line Guarantee Scheme (ECLG Scheme).
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“I am pleased to announce that I will infuse Rs 500 crore into the company. SpiceJet has a bright future and I am committed to helping it achieve its full potential. This investment will allow the airline to accelerate its growth plans and capture new opportunities in the market, grow its revenue and profits. We are committed to building a sustainable and profitable business, and this investment is a reflection of that commitment,” said Ajay Singh, Chairman and Managing Director, SpiceJet.
The airline is already utilising $50 million in funds received from ECLGS as well as its own cash reserves to restore its grounded aircraft.
In May, Chairman and Managing Director Ajay Singh stated that the airline is meticulously working towards returning the grounded fleet to the air as soon as possible.
At 09:22 hrs SpiceJet was quoting at Rs 32.77, up Rs 1.61, or 5.17 percent on the BSE.
The share touched a 52-week high of Rs 52.40 and a 52-week low of Rs 22.65 on 03 August, 2022 and 23 May, 2023, respectively.
Currently, the stock is trading 37.46 percent below its 52-week high and 44.68 percent above its 52-week low.
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