SpiceJet Share Price: SpiceJet shares rallied over 10 per cent to intraday high on NSE following the announcement that its board has approved the issuance and allotment of approximately 48.71 crore equity shares to eligible qualified institutional buyers.
It is aiming to raise Rs 3,000 crore at an issue price of Rs 61.60 per share. This issue price includes a premium of Rs 51.60 per unit and a discount of Rs 3.19 from the floor price.
According to a filing to the exchanges, the allotment will increase the company’s paid-up equity share capital 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 proceeds from this equity issue are intended for several critical objectives aimed at stabilizing SpiceJet’s financial health and resuming full operations. A primary goal includes settling statutory dues totaling Rs 601.5 crore, which encompasses obligations for Tax Deducted at Source (TDS), provident fund contributions, and Goods and Services Tax that have been delayed due to financial constraints.
The airline had received shareholder approval for the special resolution to raise up to Rs 3,000 crore in a regulatory filing on Friday.
Foreign investors, including Societe Generale – ODI, Goldman Sachs (Singapore) Pte – ODI, Discovery Global Opportunity (Mauritius) Ltd, Authum Infrastructure and Investment, and Troo Capital, have been allocated shares in the airline’s oversubscribed QIP.
SpiceJet will also receive Rs 750 crore additionally from previous funding. “This fundraise marks a pivotal moment for SpiceJet as we look to scale new heights in the aviation industry,” said chairman and managing director Ajay Singh. With this new capital, the airline is “determined to paint the skies red once again.”
SpiceJet plans to use the proceeds from this QIP to tackle liabilities, restructure leases, and expand its fleet by reviving grounded aircraft and acquiring new ones. The airline’s cash crunch is evident in monthly aviation data, revealing its market share dropped to 3.1 per cent in July.
Additionally, SpiceJet placed about 150 cabin crew on Leave Without Pay (LWP) and had to cancel flights from Dubai.
According to the Directorate General of Civil Aviation (DGCA), SpiceJet’s domestic market share fell to a record low of 2.3 per cent in August, down from 5.6 per cent at the beginning of the year. This decline underscores ongoing financial challenges, exacerbated by disputes with lessors and technical issues that have grounded a significant portion of its fleet.
SpiceJet’s operational challenges are evident as it has reduced its fleet from 74 planes in 2019 to approximately 20 aircraft currently in operation. On Friday, SpiceJet shares closed 3.25 per cent lower at Rs 66.16 on the Bombay Stock Exchange (BSE).
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