The Indian low-cost airline, SpiceJet, announced on July 12th that its major shareholder, Ajay Singh, will inject $60.85 million into the company to facilitate its return to full operations.
To accomplish this, SpiceJet plans to allocate shares, convertible securities, or share warrants to Singh on a preferential basis. Additionally, the transaction will grant the airline access to credit facilities amounting to INR 2.06 billion (equivalent to $25 million) through the government’s emergency credit line guarantee scheme.
Ajay Singh, who also serves as the managing director of SpiceJet, currently holds a 50.6% stake in the company. In a press release, Singh stated that this investment would enable the airline to expedite its growth strategies, seize new opportunities in the market, and augment its revenue and profits.
In February of this year, SpiceJet had revealed its intention to raise fresh capital amounting to $300 million through the issuance of securities. As part of this effort, it had already converted $100 million in debt into equity for an aircraft lessor.
SpiceJet is currently embroiled in disputes with certain lessors, who are seeking to deregister their aircraft and initiate bankruptcy proceedings against the airline. Additionally, the company is engaged in a legal battle with a former investor over outstanding dues totaling $46 million.
Moreover, recent media reports have indicated that India’s aviation regulator has placed SpiceJet under “enhanced surveillance.” However, the airline denies having received any communication from the regulator regarding this matter.
So far this year, SpiceJet’s shares have experienced a decline of approximately 20%. In contrast, its competitor, IndiGo, has witnessed a rise of 36% in its shares.
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