SpiceJet allots shares and warrants worth Rs 744 cr in first tranche of preferential issue
The decision was taken by the company's Board of Directors on Thursday, marking a significant step in bolstering SpiceJet's financial position.
With over Rs 900 crore of funding, the crisis-ridden SpiceJet will focus on the upgradation of its fleet and cost-cutting measures, as the no-frills airline works on ways to come out of turbulent times.
In an internal note to the senior staff on Monday, the airline said it now has a substantial bank balance of more than Rs 900 crore, including Rs 160 crore received as an installment under the government’s Emergency Credit Line Guarantee Scheme (ECLGS).
According to the note, the carrier will prioritise fleet upgrades, enhance on-time performance and cost-cutting measures will be implemented to streamline operations.
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Currently, the airline has an operational fleet of around 40 planes.
The latest installment came recently after its Chairman and Managing Director Ajay Singh infused funds into the airline.
So far, Singh has put in Rs 200 crore out of the Rs 500 crore fund infusion that he had announced last year.
SpiceJet has so far received around Rs 1,000 crore under the ECLGS.
Last week, the airline announced it has received the first tranche of Rs 744 crore as part of the total Rs 2,250 crore being mopped up through issuance of securities on a preferential basis.
In December, the airline said it would raise fresh capital of Rs 2,250 crore through issuance of securities.
SpiceJet has been facing multiple headwinds, including legal woes. Earlier this month, the DGCA imposed a fine of Rs 30 lakh on the carrier for lapses in the rostering of pilots for operations in low visibility conditions.
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