SpiceJet’s Bold Rs 3,200 Crore Fundraising Plan to Revive Operations

Cash-strapped SpiceJet aims to raise Rs 3,200 crore through QIP, warrants, and promoter capital infusion to revive its grounded fleet, settle liabilities, and enhance operations. The funds will support new fleet induction and other purposes. The proposal requires shareholder approval amid mounting operational challenges.

Cash-strapped domestic carrier SpiceJet outlines plans to secure Rs 3,200 crore through Qualified Institutional Placement (QIP), warrants, and capital infusion by its promoter, according to a recent presentation.

The airline intends to use the funds for resurrecting its grounded fleet, settling liabilities, inducting new aircraft, and addressing other operational needs.

SpiceJet highlighted a planned Rs 2,500 crore through QIP and Rs 736 crore via previous warrants and promoter infusion in a corporate presentation to investors. The proposal awaits shareholder approval.

In January, the Ajay Singh-promoted airline only managed to raise Rs 1,060 crore through preferential issues against a planned Rs 2,250 crore. Factors such as fleet reduction, high working capital costs, fixed airport rentals, and outstanding statutory dues have contributed to the airline's difficulties.

SpiceJet's operational fleet has reduced significantly, with a reported 28 planes active in 2024 compared to 74 in 2019. However, Planespotter.net data shows only 20 aircraft in operation as of September 5, with 38 grounded.

Several aircraft remain grounded due to legal disputes with lessors and vendors over non-payment. The presentation notes Rs 3,700 crore in dues to lessors, engineering liabilities, and Rs 650 crore in statutory dues.

As part of its turnaround strategy, SpiceJet plans to unground and expand its fleet, enhance presence on profitable routes, and focus on ancillary revenue streams, including cargo.

(With inputs from agencies.)