SpiceJet’s Debt Surges To Over Rs 4,300 Crore Amid QIP Plans
Low-cost carrier SpiceJet Ltd. has seen its debt rise to over Rs 4,300 crore amid curtained operations and an attempt to raise capital.
The company disclosed that its current outstanding lessor and engineering liabilities have risen to Rs 3,700 crore, while statutory dues amount to Rs 650 crore.
The airline, which has drastically reduced its fleet from 74 aircraft in 2019 to 28 aircraft in 2024, is looking to raise close to Rs 2,500 crore via qualified institutional placement. The company has approval for up to Rs 3,000 crore.
The airline had to resort to fleet reduction on the back of grounding of 36 aircraft due to unpaid dues and funding issues, it stated in an investor presentation.
SpiceJet's fund-raising attempt at the current market price will lead to an equity dilution of nearly 50%. Despite the fund raise, it will continue to have a net debt of over Rs 1,000 crore.
The airline is looking at fund raising via QIP and Rs 736 crore in warrant issuance to the promoter.
SpiceJet cited escalating costs of working capital, fixed rentals at airports, and surging fixed costs as key challenges contributing to its financial strain.
Fund Raise
SpiceJet's QIP of Rs 2,500 crore would involve issuing nearly 40 crore fresh shares, leading to a potential equity dilution of 49.8% for existing shareholders.
The company may offer an additional discount of up to 5% on the floor price to attract investors.
If the QIP is based on recent stock prices, the issue price could be Rs 63.45 per share, according to NDTV Profit calculations, based on the last two weeks's stock price.
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