“SpiceJet Settles ₹231 Crore Dues with Share Allotment to Lessors”
Indian low-cost carrier SpiceJet has allocated over 48 million shares to nine aircraft lessors, amounting to ₹2.31 billion (approximately $28 million), in a bid to clear outstanding dues and revive its operations amidst intense competition in the aviation sector.
SpiceJet, the prominent Indian low-cost airline, announced on Monday that it has issued more than 48 million shares to nine aircraft lessors, totaling ₹2.31 billion (nearly $28 million), to settle pending dues. This move comes as SpiceJet strives to resume full-scale operations after facing significant financial challenges.
Last Thursday, the carrier’s shareholders passed several resolutions, including a fundraise of ₹25 billion and the issuance of preferential shares to lessors as part of the effort to clear the airline’s outstanding debts.
SpiceJet has been working diligently to secure funds and recover its grounded fleet, which constitutes approximately one-fourth of its aircraft. This grounding resulted from fierce competition within the aviation industry.
As a consequence of its financial constraints and grounded fleet, SpiceJet’s market share dwindled to 4.2% as of July, falling behind the new entrant Akasa, which initiated commercial operations in August 2022.
Despite previously converting about $100 million in dues to aircraft lessor Carlyle Aviation into equity and debentures in February, SpiceJet remains entangled in legal disputes with other lessors over unpaid debts.
Additionally, just two weeks ago, an Indian court ordered the airline to remit $12 million to its former owner, Kalanithi Maran, by September 10, 2023, to settle outstanding financial obligations.
Two months prior to this ruling, Ajay Singh, SpiceJet’s leading shareholder and managing director, had pledged to infuse ₹5 billion into the airline to assist in its financial recovery.
SpiceJet’s cash and cash equivalents for the fiscal year ending March 31 amounted to ₹337 million.
As SpiceJet forges ahead with its efforts to overcome financial challenges and resume full operations, the allocation of shares to aircraft lessors serves as a significant step towards stabilizing the airline’s financial position and strengthening its prospects in the competitive aviation landscape.
Sources By Agencies
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