SpiceJet gets over Rs 900 crore funding, focus on cost-cutting measures
The latest installment came recently after its Chairman and Managing Director Ajay Singh infused funds into the airline.
SpiceJet board has on Tuesday approved the proposal to raise funds through the issue of up to 130 million convertible warrants each and 320.8 milllion fresh equity shares each at an issue price of Rs 50 per unit.
The low-cost carrier, SpiceJet, will issue convertible warrants to 64 allottees, including Prabhudas Lilladher Advisory Services, LKP Finance, Martina Developers, and Fincon.
As per the reports, from the issue of equity shares and warrants the airline will raise around Rs 2,254.03 crore. The issue price of Rs 50 is 18.4% lower than SpiceJet stock price of Rs 61.3 when markets ended on December 11, 2023.
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It is to be noted that SpiceJet’s market capitalization stands at Rs 4,000 crore. Promoters, led by Singh, hold a 56.5% stake in the company, and, out of this, 37.9 per cent is pledged with various lenders.
In its Q2 results for FY24, the airline reported a net loss of Rs 431.54 crore, compared to a net loss of Rs 837.8 crore in the same period a year ago.
In August 2023, SpiceJet increased its market share narrowly, beating Akasa Air, which saw an overall jump in passenger traffic by 30%, compared to the year before.
SpiceJet has been struggling over the past few months due to a severe cash crunch, leading to just a part of its fleet being operational and poor one-time performance with nearly 40-45% flights delayed daily.
Between May 2023 and October 2023, 189,634 passengers were affected by delays of beyond two hours on SpiceJet’s flights. The airline paid Rs 3.78 crore in compensation to passengers in the same period, According to data from the Directorate-General of Civil Aviation (DGCA) said.
In the same period, SpiceJet wrongly denied boarding to 991 passengers and paid Rs 18.11 lakh in compensation to passengers. Similarly, around 16,131 passengers were affected by flight cancellations and the airline paid Rs 1.33 crore as compensation to passengers, it added.
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