SpiceJet soars 6% as board okays debt restructuring plan worth Rs 2,555 cr

The company's board approved transfer of cargo business in lieu of issuance of securities including Compulsorily Convertible Debentures (CCDs) aggregate to Rs 2,555.77 crore.

Shares of SpiceJet soared 6.3 per cent to a high of Rs 42.20 in Monday's intra-day trade on the BSE after the low-budget airline's board approved issuance of equity shares worth $29.5 million to Carlyle Aviation Partner, as part of the proposed restructuring plan.

At 1 PM, the stock was up 3 per cent at Rs 40.90 on heavy volumes of around 18.36 lakh shares as against the two-week average traded volume of around 7.80 lakh shares on the BSE. Meanwhile, the S&P BSE Sensex was down 0.6 per cent at 59,109.

According to a release issued by the company to the BSE, SpiceJet will issue equity shares on a preferential basis to aircraft lessors such as Carlyle at minimum Rs 48 per share. 

SpiceJet's board has also agreed to enter into a Business Transfer Agreement with its subsidiary namely SpiceXpress and Logistics Private Limited (SXPL) for transfer of its cargo business undertaking as a going concern, on slump sale basis.

The consideration for said transfer of cargo business undertaking shall be discharged by SXPL by issuance of securities in the combination of equity shares and Compulsorily Convertible Debentures (CCDs) for an aggregate amount of Rs 2,555.77 crore.

Further, the company's board has also approved a proposal to raise up to Rs 2,500 crore within a period of one year.

This restructuring will substantially reduce the existing liabilities of the company and will help in fund raising for the business operations of the company, the release stated.

The company on Friday had reported a five-fold jump in net profit to Rs 107 crore in the December 2022 quarter as against Rs 23.28 crore in the year ago quarter. Total revenue rose 4.3 per cent to Rs 2,794 crore from Rs 2,679 crore. Post results, the stock had soared over 12 per cent on Friday. READ MORE