SpiceJet has secured Rs 3,000 crore through the sale of shares to qualified institutional buyers, providing a vital boost for the struggling airline.
Investors in the oversubscribed Qualified Institutional Placement (QIP) include foreign entities such as Societe Generale – ODI, Goldman Sachs (Singapore) Pte – ODI, Nomura Singapore Ltd ODI, and Discovery Global Opportunity (Mauritius).
On September 20, the airline’s fundraising committee approved the allotment of over 48.70 crore shares at Rs 61.60 each to more than 80 QIP participants, according to a regulatory filing.
The total securities issued amount to nearly Rs 3,000 crore.
Having operated for 19 years, SpiceJet faces multiple challenges, and this latest funding will assist in settling various dues.
“Pursuant to the allotment of equity shares in the Issue, the paid-up equity share capital of the company stands increased from Rs 7,94,67,27,170 consisting of 79,46,72,717 equity shares to Rs 12,81,68,57,030 consisting of 1,28,16,85,703 equity shares,” the filing made to the BSE on Saturday said.
Proceeds from the QIP will be used to pay creditors, including aircraft and engine lessors, as well as engineering vendors and financiers.
Five allottees each received more than 5% of the shares offered in the QIP: Authum Investment and Infrastructure Ltd (9.33%), Discovery Global Opportunity (Mauritius) Ltd (8.33%), Troo Capital (6.67%), Societe Generale – ODI (6.04%), and Goldman Sachs (Singapore) Pte – ODI (5.33%), according to another regulatory filing.
In its preliminary placement document, SpiceJet noted financial constraints have hindered its ability to meet statutory liabilities monthly. The airline has not made provident fund payments exceeding Rs 135 crore from April 2020 to August 2023.
As of September 15, the carrier’s statutory dues totalled Rs 601.5 crore, and the net proceeds from the placement will help clear these debts. Of this amount, Rs 297.5 crore is for Tax Deducted at Source (TDS), Rs 156.4 crore for employee provident fund deposits, and Rs 145.1 crore for Goods and Services Tax (GST).