SpiceJet's Financial Revival: Raising Rs 3,200 Crore to Restore Operational Capacity

SpiceJet, a cash-strapped domestic carrier, plans to raise Rs 3,200 crore via QIP, warrants, and promoter capital infusion. The funds will be used to reactivate grounded jets, settle liabilities, and induct new fleets, subject to shareholders' approval. SpiceJet aims to restructure dues and enhance its operational capacity.

Cash-strapped domestic carrier SpiceJet plans to raise Rs 3,200 crore through QIP, warrants, and capital infusion from its promoter, according to a presentation released on Friday.

The airline intends to utilize these funds for reactivating its grounded fleet, settling outstanding liabilities, inducting new aircraft, and other general purposes.

This fundraising plan includes Rs 2,500 crore through QIP and Rs 736 crore from previous warrants and promoter infusion, subject to shareholders' approval. In January, SpiceJet managed to raise only Rs 1,060 crore through preferential issues out of the Rs 2,250 crore it sought in December.

Factors like fleet reduction, grounding of planes, higher working capital costs, escalating fixed expenses, airport rentals, and unpaid statutory dues contribute to SpiceJet's financial woes.

Its operational fleet has dwindled to 28 planes in 2024 from 74 in 2019, with 36 aircraft grounded due to funding issues. According to Planespotter.net, only 20 planes are currently operational, while 38 remain grounded.

Multiple aircraft are out of service due to legal actions from lessors and other vendors over non-payment. SpiceJet faces Rs 3,700 crore in dues to lessors, engineering, and EDC liabilities, and Rs 650 crore in outstanding statutory dues.

As part of its turnaround strategy, SpiceJet aims to unground planes, expand its fleet, enhance presence on profitable routes, and boost ancillary revenue and cargo services.

SpiceJet has entered a term sheet with Carlyle Aviation Management to restructure aircraft lease dues amounting to USD 137.68 million. Lessors may also purchase compulsorily convertible debentures of SpiceJet's subsidiary SpiceXpress & Logistics, valued at USD 20 million.

This restructuring, following SEBI regulations, seeks to partially reduce arrears owed to lessors, easing the company's debt burden. Detailed adjustments and share issuance are subject to Indian law compliance, shareholder approval, and definitive agreements.

(With inputs from agencies.)