SpiceJet allots warrants worth Rs 133.2 crore to promoters

The airline says a few investors have evinced interest in the company

SpiceJet Ltd has alloted warrants to its promoters – media tycoon Kalanithi Maran and Kal Airways Private Limited – worth Rs 133.2 crore. A few investors also have evinced interest in the company, according to the airline.

Speaking to Business Standard, S L Narayanan, group chief financial officer, Sun group said that the proceeds from the current infusion would be utilised towards working capital requirements of the company in accordance with the terms of the issue.

The company has allotted 64,169,000 warrants, having an option to apply for equivalent equity shares at a price of Rs 20.76 per equity share. The total amount of funds to be infused (including premium) would be Rs 133.22 crore. With this additional funding, the promoters’ holding would increase from the present 53.48 per cent to 58.46 per cent of the expanded capital after the allotment of new shares, he said.

Earlier, in the financial years 2011-12, 2012-13 and 2013-14, the promoters had infused equity capital to the tune of Rs 130.92 crore, Rs 99.44 crore and Rs 184.27 crore, respectively.

Narayanan added that the allotment of warrants was made on March 12, 2014, after the completion of procedural formalities and had no connection with the announcement of Boeing’s order.

On Wednesday, the airline had signed a $4.4 billion deal for 42 fuel efficient Boeing 737 Max planes. The planes would be delivered from 2018 onwards.

On the utilisation of the new planes, Narayanan said that while Tier II and II cities continued to be the airline's focus, the recent order would cater to its long-term fleet expansion strategy and providing metro connectivity, domestically and internationally.

SpiceJet operates around 350 flights every day to 51 destinations, including nine international and 42 domestic ones. The airline plans to add Bangladesh and Hong Kong. Earlier, company officials had said that it had applied for the regulator's nod to fly to new six new cities including Amristar, Lucknow, Pune, Mangalore, Kozhikode as well as to Dubai.

Currently, SpiceJet has a fleet of 56 planes. comprising 41 Boeing 737s and 15 Bombardier Q400 turbo year 737 prop planes. The airline would induct five Boeing 737 each till 2017.

To a question on whether SpiceJet was interested in roping in investors, Narayanan said that a few investors had evinced interest in the company after the Government of India allowed FDI in the civil aviation sector. However, it would be improper and pre-mature to comment on the possibilities at this stage.

In December last year, the company signed an inter-line agreement with Singapore-based Tigerair.