SpiceJet announced on January 26 that it has successfully raised Rs 744 crore in the first tranche of its capital infusion via preferential allotment of shares and warrants.
The airlines 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.
SpiceJet is set to complete another tranche of equity and warrants raise from the remaining subscribers. However, the airline has requested additional time from the competent authority to finalize the process due to limited banking days arising from long weekends during the intervening period, according to an exchange filing and media release.
Ajay Singh, Chairman and Managing Director of SpiceJet, expressed satisfaction with the completion of the first tranche, highlighting the confidence investors have shown in SpiceJet's growth prospects.
"The fund infusion will open new avenues for SpiceJet, resulting in a more cash-efficient operation, expanded fleet and network,” Singh said.
Airline battles cash crunch woes
The low-cost carrier has been facing cash crunch issues, being entangled in numerous legal battles concerning unpaid dues involving both former promoters and aircraft lessors. With only a fraction of its fleet currently operational, the financially strapped airline is experiencing consistent one-time performance issues, resulting in nearly 40-45 percent flight delays every day.
Last month, the board of the airline approved a proposal to raise Rs 2,250 crore by issuing up to 130 million convertible warrants and 320.8 million fresh equity shares at an issue price of Rs 50 each.
SpiceJet records improved performance in Q2 2023
In the quarter ended September 2023, the airline shrank its net loss to Rs 431.54 crore from Rs 837.8 crore a year ago. The Gurugram-based airline reported a net profit of Rs 197.53 crore for the April-June period.
As of December 2023, SpiceJet’s market capitalisation stood at Rs 4,000 crore. Promoters, led by Singh, held a 56.5 percent stake in the company, and, out of this, 37.9 percent was pledged with various lenders.
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