SpiceJet gets shareholder nod to raise Rs 2.2K cr by issuing equity

Mahapatra family now owns 21.94 per cent shares in SpiceJet; Ajay Singh's shareholding reduces from 56.48 per cent to 38.55 per cent

SpiceJet shareholders on Thursday approved the issue of preferential equity and warrants to 63 major entities which includes Aries Opportunities Fund, the Mahapatra family—Preeti and Harihara Mahapatra— and others. 

Preeti and Harihara Mahapatra will own a major stake in the airline; 19.95 per cent and 1.99 per cent respectively. Meanwhile, Aries Opportunities Fund will hold 3.99 per cent share in the low cost carrier. 
 

The airline concluded its annual general meeting (AGM) with its shareholders on January 10. Shareholders have approved a new allotment where 63 entities will cumulatively infuse Rs 2,241.5 crore in SpiceJet. The airline is raising Rs 1,591.5 crore and Rs 650 crore by the issuance of equity and warrants respectively. 

This equity and warrants will be issued to 58 and five entities respectively on a preferential basis.  The 58 entities will get 318.3 million shares in SpiceJet at a price of Rs 50 per share. The other five entities will get 130 million shares in the airline at the same price.

 

The total Rs 2,241.5 crore fundraise will reduce promoter Ajay Singh’s and related entities’ share in the airline from 56.49 per cent to 38.55 per cent once the equity is issued to aforementioned entities. 

Meanwhile, if the warrants issued to the other five entities are converted to equity, the shareholding will come down to 34.13 per cent, according to SpiceJet. Shareholders have approved the reappointment of Ajay Agarwal and Manoj Kumar as independent directors and Shiwani Singh as the company's director. 

Elara India Opportunities Fund, Nexus Global Fund, Prabhudas Lilladher and Resonance Opportunities Fund participated in the fundraise.

The airline said it will use the proceeds of the issue to pay statutory obligations such as tax deducted at source (TDS), good and services tax (GST), provident fund (PF), etc; settle past dues with creditors; unground its grounded planes and acquire new aircraft; pay for aviation turbine fuel; paying salaries to employees; and general corporate purposes.
 

In December, the airline said its board had approved raising fresh capital from financial institutions, foreign institutional investors, high-net-worth individuals, and private investors.