Spicejet to seek approval for ₹2,250 crore fundraise, shares soar 5% ahead of AGM
2 min read • Updated: January 17, 2024, 8:00 PM
The low-cost carrier plans to use the funds to drive expansion and revive the grounded planes
Shares of the low-cost carrier surged more than 5% ahead of its annual general meeting (AGM) on Thursday. At the AGM, the board of the company is expected to seek approval from stakeholders to raise ₹2,250 crore through issuance of equity shares. It plans to use the funds to drive expansion and revive the grounded planes.
“This is a significant fund raise and it is designed to strengthen SpiceJet’s financial position, enhance operational capabilities, settle outstanding issues and position the airline again for sustained growth in the dynamic aviation sector,” said Ajay Singh, Chairman and Managing Director, SpiceJet.
The funds will be deployed to improve product presence and market share, said the company. The capital will be used for initiatives such as fleet enhancement, route network expansion, and technological advancements.
Meanwhile, media reports are also claiming that Ireland-based Carlyle Aviation Partners, which is a large institutional investor, could be looking to invest in SpiceJet and the airliner is in the race to acquire the grounded rival GoFirst.
The senior management of Carlyle Aviation recently held talks with Singh to discuss SpiceJet and its cargo arm strategies and future prospects, according to reports. It’s important to note that Carlyle Aviation currently holds a 7% stake in SpiceJet.
Spicejet has been grappling with multiple challenges recently. In the September quarter, its net loss stood at ₹428 crore compared to a loss of ₹835 crore in the same period last year.
The management said that the July-September quarter has historically been a challenging period for the aviation industry. “This year, the challenges were further compounded by elevated fuel prices, impacting operational costs,” said the management.
The crucial AGM is scheduled to happen at 3.30pm on Thursday.