On the back of Rs 3,000 crore funds raised via qualified institutional placement (QIP), struggling carrier SpiceJet said it will restructure its balance sheet, clear all outstanding dues, unground and upgrade its fleet in the next two years. The low-cost carrier claimed that the response from the qualified institutional investors was ‘overwhelming’, underscoring the strong confidence in SpiceJet’s growth potential.
The list of the investors included Goldman Sachs (Singapore), Morgan Stanley Asia, BNP Paribas Financial Markets, Nomura Singapore, Tata Mutual Fund, Discovery Global Opportunity, Societe Generale, among others.
“We defied sceptics in 2015, and once again, we have proven them wrong. With renewed enthusiasm and fresh capital, we are fully committed to restructuring our balance sheet and clearing all outstanding dues,” Ajay Singh, chairman and managing director, SpiceJet said to shareholders in the company’s FY24 annual report.
SpiceJet is expecting an additional Rs 736 crore from the previous funding round.
Following grounding of its planes and troubles impacting its operations, SpiceJet’s market share plummeted to 2.5% by the close of September, according to the DGCA data. Ten years ago, its market share stood at 17%.
Notably, two-year-old Akasa Air, which flies the same aircraft type as SpiceJet, has nearly twice the market share of SpiceJet. “We have earmarked Rs 800 crore for the ungrounding and upgrade of our fleet, and I am confident that by 2026, SpiceJet will be operating with a fleet of 100 aircraft,” Singh added.
The fresh capital raised will be instrumental in ungrounding fleets, acquiring new aircraft, investing in technology and expanding into new markets. The company plans to unground 28 aircraft.
After repetitive failures in clearing dues to its lessors, the Delhi High Court pulled up SpiceJet in August this year. The carrier had accumulated unpaid dues of tax deducted at source (TDS), goods and services tax (GST) and contribution towards provident fund (PF).
SpiceJet is seeking shareholder approval in its upcoming annual general meeting (AGM) to raise its authorised share capital from Rs 1,500 crore to Rs 2,000 crore, to facilitate the infusion of fresh share capital.