SpiceJet promoter Ajay Singh to inject Rs 500 crore in struggling airline

The infusion of fresh capital will substantially strengthen the SpiceJet's financial position

SpiceJet promoter Ajay Singh will inject Rs 500 crore into the loss-incurring carrier, in lieu of fresh equity shares or convertible instruments, or both, the airline said in a press release on Wednesday.
 

Singh's offer to inject capital came during a board of directors meeting earlier in the day to discuss raising fresh funds amid the ongoing financial crisis and legal disputes.

The board, after deliberating over his offer, "agreed to issue equity shares and/or convertible securities/equity share warrants on preferential basis" in one or more tranches for an amount of Rs 500 crore, said the company.

The infusion of funds will "substantially strengthen the company’s financial position and is a powerful vote of confidence in its future and long-term viability", it added.

With this capital injection, the airline said it would be "entitled to additional credit facilities of Rs 206 crore" under the government's emergency credit line guarantee scheme (ELGS).

SpiceJet further said that it is already utilising $50 million-worth ECLGS funds that it has already received and its own cash to revive its grounded aircraft.

Two of the grounded aircraft, a Boeing 737 and a Q400, have been operationalised so far and more planes are expected to re-join the fleet soon, it added.

Commenting on his decision to infuse Rs 500 crore in the airline, Singh said this investment "will allow the airline to accelerate its growth plans and capture new opportunities in the market, grow its revenue and profits."

"We are committed to building a sustainable and profitable business, and this investment is a reflection of that commitment," he added.