In a move which will deleverage its balance sheet, enabling it to access fresh funding, low-cost carrier SpiceJet on Monday restructured its outstanding dues worth $100 million to aircraft lessor Carlyle Aviation Partners into equity shares and compulsorily converted debentures (CCDs).
The company’s board approved issuing fresh equity shares of $29.5 million (Rs 244.28 crore) to the lessor at Rs 48 per share or the Sebi-determined price, whichever is higher. Following this transaction, Carlyle Aviation Partners will have over 7.5% equity stake in SpiceJet.
The board also passed a special resolution (subject to nod from its lenders) which allows it to enter into a business transfer agreement with subsidiary SpiceXpress and Logistics (SXPL) for the transfer of its cargo business undertaking on a slump sale basis.
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The consideration for the said transfer of cargo business undertaking will be discharged by SXPL by issuance of securities in the combination of equity shares and CCD to the parent company for an aggregate amount of Rs 2,555.77 crore.
Additionally, SpiceJet will transfer the CCDs of SXPL, aggregating to $65.5 million, subject to regulatory approvals. The CCDs will be converted into equity shares of SpiceXpress at an anticipated future valuation of $1.5 billion (Rs 12,422 crore).
SpiceJet
Chairman and MD Ajay Singh said: “Carlyle Aviation Partners picking up a stake in our passenger and cargo business reinforces the huge potential of SpiceJet and SpiceXpress. Carlyle partnering us will tremendously boost our business and this deal would be a transforming moment of change and opportunity for us.”
“The transaction will substantially deleverage our balance sheet, thereby allowing us to access fresh funds at a competitive rate and we aim to follow suit with other lessors as well in the near term,” Singh added.
Additionally, the board as a part of restructuring with aircraft lessor CLSEC Holdings 10 DAC (affiliate entity of Castlelake), has in-principally agreed to acquire two Boeing 737-800 airframes by purchasing entire share capital of AS Air Lease 41 (Ireland) from CLSEC Holdings 10 DAC (affiliate entity of Castlelake).
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Its board has also sought shareholders’ approval to raise fresh capital of up to Rs 2,500 crore through an issue of securities to qualified institutional buyers.
As of December 31, 2022, SpiceJet’s total liabilities stood at Rs 14,000 crore. The company did not disclose its debt separately in its October-December quarter results.